Question

Premium Auditing

Examine the rating classes applied to the accounts that you audit.

What regulations limit or enhance the insurer's ability to establish fair and accurate insurance rates and premiums for insureds?

Answer 1

Premium Auditing:

The Primary purpose of premium audit is to calculate the final premium. When Policy was issued, the premium was an estimate of an exposure basis multiplied by a rate. the rate used is determined by how the exposure base is classified.

The audit will examine your records to establish the actual exposure basis and make sure that the correct classification codes and rates are used in determining your final premium.

Because the original premium was an estimate, the audit will most likely result in a change of premium and/or classifications for your business.

Premium audits are commonly performed on General Liability, Liquor Liability and Workers Compensation policies. By auditing these policies, we can make sure that your business pays the correct premium. Typically, information from the audit will generate either a bill or a refund. In addition, the premium audit can provide valuable information about your business operations.