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.
