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Notice No. 107
NOTICE TO INSURANCE CARRIERS AND SELF-INSURED EMPLOYERS UNDER THE
LONGSHORE AND HARBOR WORKERS' COMPENSATION ACT
SUBJECT: Audits verifying Form LS-513, Report of Payments
The Division of Longshore and Harbor Workers' Compensation (DLHWC) each
year conducts a limited number of audits in order to verify the information
contained in certain Forms LS-513, Report of Payments, submitted to it. These
reports are filed annually by each authorized insurance carrier and each
self-insured employer and form part of the basis for calculating Special Fund
assessments under section 44 of the Longshore and Harbor Workers' Compensation
Act (33 U.S.C. 944(d)(2)).
The purpose of this Notice is to provide each insurance carrier and
self-insured employer with a statement of the method we will use to select the
companies to be audited each year.
Since about 84% of the payments reported to the DLHWC are made by the
forty insurance carriers and self-insured employers who report the most
payments, the audit process will primarily focus on the top twenty insurance
carriers and the top twenty self-insured employers measured by the total
indemnity payments reported for each calendar year. The companies to be audited
each year will be selected in the following manner:
- Any insurance carrier or self-insured employer found by audit to have
underreported payments to the extent that an additional assessment payment into
the Special Fund exceeding $400,000 was made to the DLHWC during the previous
year.
- Three insurance carriers and one self-insured employer that have not
been audited during the previous 3 years in the case of an insurance carrier
and 4 years in the case of a self-insured employer will be randomly selected
for audit each year from the top ten in each group.
- Three insurance carriers and one self-insured employer that have not
been audited during the previous 4 years in the case of an insurance carrier
and 5 years in the case of a self-insured employer will be randomly selected
from the second ten in each group.
- Additional audits will be randomly selected from the remaining group
of insurance carriers and self-insured employers that have not been audited
within the last 6 years.
The above selection criteria are subject to the following factors.
- Although the audits will initially review payments reported for the
calendar year immediately prior to the audit, the auditors will attempt to
locate underreported payments for previous years and will include any
unreported payments for prior years discovered during the course of the audit.
- The number of audits each year may be affected by the amount of money
available for audits. In the event that DLHWC is unable to fund all of the
audits set forth above, it may reduce the number of audits in categories 2 to
4. In the event that funding allows for more audits than specified it may
increase the number of audits in categories 2 to 4.
This Notice is effective immediately.
All questions concerning this Notice should be directed to the
undersigned at 202-693-0925.
MICHAEL NISS Director, Division of Longshore
and Harbor
Workers' Compensation
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