Audit review leads to
client savings of $18,940
Insured
The insured is a family-owned trucking company with 20 employees. Its primary
business is hauling dirt, sand and gravel, as well as landscape product
sales.
Situation
In early April 2008, the insured received an additional premium from the
2006/07 final audit in the amount of $15,129.
Assessment
Following established guidelines as set forth by the Institute of WorkComp
Professionals (IWCP), a Certified WorkComp Advisor (CWCA) reviewed the final
audit billing and determined that the audit should be placed under protest.
Audit worksheets were requested from the insurance carrier. Once the worksheets
were received and analyzed, major discrepancies became apparent.
Solution
Examination of the final audit worksheets revealed that the auditor had
not properly identified payroll, due to a split Normal Anniversary Date
during the policy period. As a result, the carrier had front-loaded the
first rating period, which had significantly higher rates. To offset this,
the CWCA had spreadsheets prepared that properly recorded the payrolls by
rating period, which in turn provided a calculation that correctly identified
the proper earned premium.
Result
The carrier’s audit supervisor agreed with the findings and processed
the revised final audit billing. Subsequently, this produced a final audit
return premium of $3,811. As a result of the Certified Work Comp Advisor’s
findings, the net premium savings for the client was $18,940. |