Workers Comp Premium Auditor Fraud
Workers Comp premium auditor fraud is very hard to detect. The auditors possess such a high level of fiduciary responsibility as they review millions of dollars in premium every week. This fiduciary responsibility came to light with the recent West Virginia case.

A Brickstreet premium auditor had been charged last month with numerous counts of insurance and coal-related fraud. The auditor allegedly received kickbacks from employment agencies that provided workers for the coal industry.
How does a workers comp insurance carrier avoid this situation? Insurance premium audit fraud is very hard to detect as there is a level of trust that the carrier or auditing company must-have for their auditors.
The likely way to discover this rare type of fraud would likely be internal auditors better known as “auditing the auditor.” Brickstreet should really not shoulder too much of the blame. It was their employee. However, the only way that this could ever be detected is through an internal audit.
Most insurance carriers have an internal audit department. Almost all of them do not audit workers comp auditors. This may now change somewhat with the recent West Virginia case.

The majority of these audits are performed in person. How can an internal auditor know their field premium audits are accurate without having to re-visit most of the employers? The West Virginia case was even more difficult as the companies in question were employment agencies.
Employment agencies are very difficult companies in which to determine the proper premium as there are so many classification codes. Their E-Mod rating and premium audit sheets can look similar to a novelette.
Workers Comp claim departments are audited by many different entities including their internal audit departments. Premium audit departments may receive the same scrutiny in the near future.
Also Read: What Is A Guaranteed Cost Program In Workers Compensation?
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