Audit Agreement – Premium Auditor Asked Employer To Sign Off ???
The Audit agreement form has been a rather controversial topic. This question was emailed in earlier this week. We had our yearly Workers Comp premium audit last week. The insurance company’s auditor actually worked for a premium audit company and was not a direct employee of the insurance carrier.

After the auditor completed the audit, I, as CFO was asked to sign off on an audit agreement form where I agreed to pay the premium owed after the audit and that I agreed to the audit. The form is sitting on my desk. Should I sign it? What are the repercussions if I do not sign it?
This is a disturbing trend that I have heard on the Workers Comp airwaves over the last few years. There seems to be not even an audit company, but certain auditors in certain companies that have used this tactic.
I am not sure that it is even legal to ask you to sign anything after an audit admitting that you owe the $. In all Workers Comp policies, there are rules about Workers Comp premium disputes. I have never personally seen in any policy the requirement to sign an agreement to the audit results. There are also many state laws, rules, and regulations that would seem to prohibit that request. Of course, if you sign it, then the policy and rules/regulations will not matter.

Your Workers Comp policy may be unique. I thought I would reach out to a few premium auditors and ask their opinion on if they have ever requested this sign off. I also asked if they knew of any auditors, auditing companies, or insurance carriers that requested a signed agreement.
The answers were unanimously – no. According to the insurance premium auditors if the premium bill was in collections for a long period of time, there are some agreements that could be signed such as a partial payment arrangement or if the file was in litigation to stop the collection process.
I am not saying NEVER on this one. There may be some specialized policies where this may occur, but it would still be in the policy. I suggest immediately reading the policy front to back.
By signing the agreement, you will also be giving up certain rights as a policyholder.

As I mentioned previously, I have never seen in any policy the requirement to sign off on a premium audit whatsoever. There are a few exceptions that I noted in the last post.
An employer would give up most of their rights by signing such an agreement.
These rights would include:
- The right to later question the audit is eliminated. If you agreed to the audit, it is too late to even consider a premium audit dispute. Get the out the checkbook and pay up.
- Some of the agreements may require that your company also give up all rights to the present audit and all of the past ones. If you find a mistake in your next policy or the current one, you cannot ask for premium refunds on past policies.
- Your company may be required to pay the premium audit bill very quickly according to the auditor’s side agreement.
- The insurance carrier may possibly still be able to audit your past and present policies and charge your company more premium. This would all depend on the agreement you signed with the auditor.
- Your company may have to pay all or a portion of the audit findings on the spot. This is rare, but it does happen.
Please note that most premium auditors are good people just doing their jobs. I cannot imagine why these good people would want you to sign such an agreement.
There are certain instances where an agreement might be appropriate, but not on a just-completed workers compensation premium audit.
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