Once your Workers Compensation policy has expired, you can expect to be contacted by your carrier. You will be receiving either a letter or a phone call, asking for your actual payroll numbers so that they can “true up” your premium.
Despite the importance of the audit process, many policyholders simply ignore this request due to the seemingly cumbersome nature of audit paperwork. Although most carriers handle this situation differently, when this happens the carrier is then forced to arbitrarily assign a final payroll, which is generally not to the policyholders favor.
However, this process will all change on January 1, 2017 when the WCRB (Wisconsin Compensation Rating Bureau) will mandate that every carrier add an endorsement charge to your Workers Compensation policy called “Audit Noncompliance Charge” or ANC.
The intent of this endorsement is to create uniformity in how carriers arbitrarily assign payroll in the absence of actual payroll data. As of January 1, 2017 the charge will be 2 times your estimated premium. This will be very costly for those policyholders who choose not to return the audit paperwork. Therefore, while it has always been important to complete the audit paperwork, starting January 1st it will now be even more critical.
For more information on the changes to Workers Compensation policies coming in 2017, contact a Knowledge Broker.