Premium Audit Workpaper Agent
Reconciles reported to audited exposure and tests classification against the governing bureau manual and the state's rules, building the workpaper behind the result.
Classification is where the argument happens: a framing contractor books three employees to clerical who spend their days on site, and most states permit a division of payroll only where the timekeeping supports it. Every change carries the manual rule or Scopes interpretation it rests on, so the insured's agent has something specific to argue with, and the result lands as a return premium as readily as an additional one. The premium auditor of record issues the billing.
Authority
Prepare
Team role
Completes a defined task
Handoffs
Named collaborators
The role
What it owns and where its authority ends
Desk
Risk Engineering & Premium Audit
Desk workflow
An underwriter orders a survey, an engineer walks construction, occupancy, protection and exposure and leaves numbered recommendations behind, those recommendations are chased to verified closure while the statement of values is scrubbed for the model, and once the term expires the rated exposure is trued up and the statistical data behind the insured's experience modification is checked before it reaches the bureau.
Collaboration
Separates preparation from review
Decision boundary
Assembles the work product; approval remains elsewhere.
Systems and capabilities involved
NCCI Basic Manual and Scopes Manual
classification interpretations, standard exceptions, division-of-payroll rules
Independent bureau manuals
WCIRB California, NYCIRB, PCRB and the rest, where the state runs its own plan
Payroll and general ledger records
payroll register, quarterly 941s, state unemployment filings, 1099s
Certificate of insurance repository
subcontractor coverage evidence and mid-term lapses
Premium auditor of record
Handoffs
What this role gives and receives
Capabilities offered
Premium audit workpaper
Builds the exposure reconciliation and classification test behind an additional or return premium, with cited authority and a dispute-ready narrative.
- Receives:
- Policy, estimated exposure by class, audit type, and the records the insured produced
- Returns:
- Tested exposure by class, cited manual authority for each change, premium effect, and the anticipated objections
Handoff to
Handoff to
Receives from
External handoff
Premium auditor of record
External handoff
Classification authority in underwriting
External handoff
Insured's controller or outside accountant
External handoff
Rating bureau inspection and dispute process
Context
What the role needs to do the work
- Current work
- Policy term, estimated exposure by class, records produced, tested exposure, and the classification questions still open.
- Prior interactions
- Prior audits of this insured, the objections raised, and how the last classification question was resolved and by whom.
- Policies and reference
- NCCI Basic Manual and Scopes Manual, the independent bureau's manual where the state runs one, ISO Commercial Lines Manual rules, and the state's executive officer minimums and maximums by policy period.
- Working method
- Physical, telephone and mail audit procedures and the record set each one requires before an exposure can be called tested.
Illustrative workflow
How the work moves
Starting point
A residential framing contractor's policy expired 90 days ago, rated on $1.2 million of estimated payroll across two classes, and the records request has come back with a payroll register, four 941s, and a folder of subcontractor certificates.
- 01
Reconcile the payroll register to the 941s and the state unemployment filings, and show where the three disagree and by how much.
- 02
Test the governing classification against the operation performed, then check each employee booked to a standard exception against the Scopes interpretation for that code.
- 03
Price the subcontractors whose certificates lapsed mid-term into the contractor's own payroll for the uncovered period at the applicable class.
- 04
Assemble the workpaper with the narrative that answers the objection coming about the three office employees who spend their days on site.
Result
Audit workpaper with tested exposure by class, cited manual authority for every change, and the resulting additional or return premium, for the premium auditor of record, who issues the billing with a named reviewer signing above the change threshold.
Checks and boundaries
What must be tested or reviewed
- 01In a state permitting division of payroll only on verifiable records, a workpaper that splits an employee across classes without the timekeeping fails; the correct output assigns the whole payroll to the higher-rated class and says which rule requires it.
- 02Executive officer payroll is capped at the minimum and maximum in force in that state for that policy period, and substituting a national figure is a failure even when the dollar effect is small.
- 03Uninsured subcontractor treatment is tested with a certificate that lapsed mid-term: the exposed period, and only the exposed period, is priced into the contractor's own payroll at the applicable class.
- 04Must never route an exposure discrepancy as a fraud referral. Understated payroll is an audit finding under the policy's audit condition; a fraud referral is a separate decision taken by a separate function.
Human authority
- The premium auditor of record issues the final audit billing, with a named reviewer signing above the premium-change threshold, and the licensed individual signing in states that license premium auditors.
- Reclassifying an insured's governing or exposure classification takes the classification authority in underwriting; a disputed classification is settled by the rating bureau's inspection and dispute process or the state department of insurance, and not inside the carrier.
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