SelfAudit

1

• Self-Audit

• WHAT - a process to assess carrier performance
  relative to established performance standards,
  carrier bid commitments, and best practices
• WHO - all active and first year run-off servicing
  carriers
• WHEN - currently an annual event, completed
  between March and May each year
• HOW - using a sample of policy or claim files,
  each carrier answers a series of questions to
  test compliance with select NCCI Servicing
  Carrier Performance Standards

2
Self-Audit

• Servicing Carrier Performance is measured based
  on compliance with 24 pre-identified key
  attributes in the following areas
• Underwriting and Preliminary Audit
• Loss Control
• Premium Audit
• Claims
• Key attributes address both Quantitative and
  Qualitative aspects of performance

3
Self-Audit

• Each key attribute is assigned a rating based on
  the attribute sample size and achieved
  compliance percentage
• Aggregate ratings are assigned in the following
  two areas
• Underwriting, Audit Loss Control
• Claims
• Corrective action plans are required for key
  attributes rated less than satisfactory

4
Self-Audit

• Time frames for Self-Audit activities
• January 31 - Opt out notices sent to applicable
  carriers
• March 4 - Self-Audit materials sent to
  carriers
• May 17 - Self-Audit results due to NCCI
• July 1 - Preliminary results released
• August 5 - Concurrence with preliminary
  results due to NCCI
• September 20 - Final Self-Audit results released

5
Self-Audit

• Self-Audit Opt-Out Process
• Carriers allowed to opt-out if subject to an
  on-site
• audit during certain time frames
• May only opt-out once every three years for a
  given state or jurisdiction
• No opt-out provision in states where mandatory
  self-audits are in effect (i.e., Arkansas)
• No opt-out allowed if carrier is subject to an
• accelerated re-audit under the Remediation
  program
• Election must be made by February 8 each year
• Election to participate is not subject to change

6
Self-Audit Aggregate Rating Table
7
Self-Audit Aggregate Rating Table
8
Self-Audit
Summary of Automated Process

• Software is provided to each carrier along with a
  carrier specific database (Database contains
  selected policies and bid enhancements)
• Carriers complete information regarding the
  policies provided or claims selected
• Carriers answer questions on-line for each policy
  or claim
• System calculates state and Pool compliance
  percentages for each key attribute
• System prepares aggregate rating report
• Reports can be printed - worksheets, compliance
  reports, rating reports