For many insureds, an audit isn’t something to look forward to. There are always many questions from those who have never been involved with the process. What information will we need? Our projections were accurate; why do we even need to be audited? When does this have to happen? We’re too busy. Where does the audit take place? Can I email everything? Who will we be meeting with? How will the confidentiality of my records be preserved?
Audit, by definition, is an official inspection of an individual’s or organization’s accounts. A workers’ compensation premium audit is just that! It is an official review of a policyholder’s payroll and financial records. These records include employees’ payroll earning statements, federal and state quarterly tax reports and disbursement journals, to name a few. Be prepared to discuss your business operations including employee duties, subcontracted work, and arrangements with anyone paid to perform labor on your company’s behalf.
Policy premiums are estimated at inception based on information provided by you or your agent. An audit will allow us to accurately calculate earned premium based on precise payroll data, as well as confirm your business operations.
In addition to calculating premium, data is reported to various national and state rating bureaus. The data is then utilized for rate-making and to calculate account specific “Experience Modification” factors for workers compensation. These factors can have significant effect on future renewal premiums. Failure to keep current with audits can adversely affect factor promulgation.
A Premium Audit is conducted after the expiration of the policy term. Audits should be completed within 120 days and no later than 180 days after expiration. Failure to complete audits timely can result in estimated premiums, experience modification issues and other collection problems.
Depending upon the premium size, type of operation, and individual state requirements, MSIG will conduct a physical audit at the Insured’s office, the insured’s location of choice (ie Accountant’s office), a virtual audit via electronic submission, or a voluntary/phone audit via a combination of emails and phone calls.
Here at MSIG, we have partnered with well-know and reputable vendors to complete our client audits. We utilize well-seasoned auditors on every account in order to provide efficient service. In addition to our vendors, our “in-house” staff of premium auditors are available to perform Virtual and Voluntary/Phone audits. We also offer a secure mailbox where private and ‘password protected’ information can be sent to ensure confidentiality.
For additional information regarding MSIG’s Premium Audit Process, please visit our website:
or contact us:
MSIG refers to the U.S. subsidiary insurers of Mitsui Sumitomo Insurance Company, Limited, a member of MS&AD Insurance Group. The insurers are managed by Mitsui Sumitomo Marine Management (U.S.A.), Inc. with offices at 15 Independence Boulevard, P.O. Box 4602, Warren, NJ 07059-0602, USA.