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TexLaw, Attorney
Category: Legal
Satisfied Customers: 4430
Experience:  Lead trial/International commercial attorney licensed 11 yrs
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this is a california work comp question. i am pres of a corporation

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this is a california work comp question. i am pres of a corporation in construction (small co) we are having a final audit for last years comp. due to timing, we have not been able to meet with the auditor and have had to change the dates a couple of times. the auditor told me that if we don't meet they (ins co) will charge me an additinal 1/2 of the total premium. i am ok with that because that is what i would owe (or maybe a little more) any. then i got a letter stating that if they don't do the audit soon, they can charge me up to 3x's the total premium stating a Florida law. i have looked over my policy, that is not in there. my question is this. does ca have a law which states how much a comp co. can charge additionly if a company does not allow a final audit.

Zachary D. Norris :


Zachary D. Norris :

Your question will require some legal research on my part. Please check back for an answer shortly.

Can you tell me what Florida Law the Insurance Company is citing?
Customer: replied 4 years ago.
They are qouting NCCI florida state special audit rule H 4440.3381(8)
The rule they are citing is not a legal rule or regulation. It is from a private insurance association. You insurance company may use their standards, but they cannot demand that you pay them an additional amount of premium.

The State of California does not set workers compensation insurance rates. Thus, what's going on in your case is that your insurance policy (somewhere in the fine print) has stated that if an audit is not allowed, the insurance company is allowed to treble the premium in order to cover the non-assessed risk. In many cases, failure to comply with an audit request in a timely fashion will result in cancellation of the policy altogether.

However, again, there is no law in California prohibiting what the insurance company is doing.

Please let me know if you need further information.

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