Offer Warning – Premium Audit Before Carrier Audits Policy
A certain type of premium audit offer warning for our blog readers was required after two phone calls received on this illegal type of offer this week.
As I have discussed many types; and as you will see in the heading of this article, we, of course, perform audits for employers and governmental agencies. Our audits are basically a review of the last three years for policy overcharges. This is one of a group of our services.
I have received two phone calls this week that were disturbing, to say the least. One employer from CA and another from WV both called to ask about a service where the auditor would come in and basically set up the business book BEFORE the premium audit by the insurance carrier. This is highly illegal.
There is nothing wrong with going over the premium audit with or without a consultant after the premium auditor finishes their audit and produces a premium audit report.
From what I could gather, the so-called premium auditing company’s goal was to lower the premium BEFORE THE AUDIT. That is a good way to spend time in jail. I had written about this type of unscrupulous audit here and here. The company owner and the premium auditing consultant are now both doing hard time in a South Carolina prison.
Honesty is always the best policy when dealing with insurance company premium auditors. Your company should pay every cent in premiums you owe, but nary a cent more.
These types of bad-actor companies give the premium auditing and risk management consulting professions a bad name to say the least. Do not end up being accused of the “F” word in insurance. California has added some very strong laws dealing with this subject. I will cover that next time.
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