Final Workers Comp Policy Bill Comes From The Premium Audit
The final Workers Comp Policy bill results directly from premium audit. I received a question late last night on the last article I wrote on Deposit Premium. The question – (paraphrased) was:
We paid a very large deposit premium upfront January 2012. We have not heard from the insurance carrier except to renew our current policy for 2013. Should we be expecting a call or letter from our carrier’s premium auditor? Was the deposit premium for 2012 adequate? Should we be doing something on our end?
If your company has paid all premiums requested by your carrier, then you have not really done anything that would violate your 2012 or 2013 policy. April is a little late for a policy that expired in December 2012. Your final policy premium should never be considered as the deposit premium with your new policy.
Most states do have some type of rules on when policies can be audited by the carrier. If you look in your policy, in usually the last few pages, you will find your carrier’s premium audit rules. Most of the time it will have a passage or two on your responsibilities for your final premium audit.
You may want to check your incoming letters. We have seen a very large carrier in the mid-Atlantic states send out a large amount of marketing materials – sometimes two or three times a month. A letter with a follow up letter was sent out by the carrier from the audit department. The client employer actually thought it was marketing material and threw them out each time.
Their first notice was a 10 day notice to cancel their current policy for not abiding by the premium audit rules for the prior policy. With our assistance, the situation was straightened out in the nick of time and coverage cancellation was avoided.
A good suggestion is to have someone responsible for any (not just Workers Comp) insurance mail. Do not assume that your agent is receiving carbon copies of all of the mail from your carrier.
The designated person should bring any of these items to the attention of management:
- Endorsements
- Changes to premiums
- Bills
- Policies
- Notices
- Audit results
- Audit bills
If you feel your company may be owed a refund, then you may want to reach out to the carrier. As post-audit policy refunds are becoming more rare, that is a decision you may want to weigh heavily. All Workers Comp policies require responses, not initial contact.
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