Workers Comp Insurance Company Auditor Financial Records Access
Should an insurance company auditor access my financial records? This was a question from one of our blog readers. We have seen this situation a few times when we audit workers comp reserves or premiums for employers.
It is never a good idea to refuse access to your records by the workers comp auditor. The auditor will report your company as being non-compliant back to the insurance company. Every state has its own rules on how an employer can be charged premiums for non-compliance with a workers comp auditor’s request.
Many states have bolstered the audit non-compliance laws. Some states have increased the penalties for non-compliance.
The insurance carrier will usually charge 300% of the estimated premium. The workers comp carrier will also issue an immediate cancellation notice if they are the carrier of record. California’s WCIRB will leave out the payroll data to offset the claims, which can be a very severe penalty for a small employer.
The auditor will also be very inquisitive to why they were not allowed access. Causing a controversy before the audit begins may result in your company facing extra scrutiny. This will also harm the relationship you have with your agent.
There are many ways to dispute an audit if you disagree with the results. It is not a very good idea to dispute the audit before it even occurs. You have the right to have the audit at a time that is convenient for you and your company.
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