https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3AAuditDefinition:Audit - Revision history2026-06-17T13:05:58ZRevision history for this page on the wikiMediaWiki 1.43.8https://www.insurerbrain.com/w/index.php?title=Definition:Audit&diff=6699&oldid=prevPlumBot: Bot: Creating new article from JSON2026-03-10T04:41:28Z<p>Bot: Creating new article from JSON</p>
<p><b>New page</b></p><div>📋 '''Audit''' in the insurance industry encompasses a range of formal examinations — financial, operational, regulatory, and [[Definition:Premium | premium]]-based — designed to verify that an [[Definition:Insurance carrier | insurer]], [[Definition:Managing general agent (MGA) | MGA]], or other market participant is operating accurately, compliantly, and in accordance with contractual obligations. While the term applies broadly across business, insurance audits carry industry-specific dimensions: [[Definition:Insurance regulation | state regulators]] conduct periodic financial examinations of carriers, [[Definition:Lloyd's of London | Lloyd's]] performs audits of [[Definition:Coverholder | coverholders]], and insurers routinely audit their [[Definition:Delegated underwriting authority (DUA) | delegated authority]] partners to ensure that [[Definition:Underwriting | underwriting]] guidelines and [[Definition:Binding authority agreement | binding authority agreements]] are being followed.<br />
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🔧 Premium audits represent one of the most distinctive forms of audit in the insurance world. In [[Definition:Commercial insurance | commercial lines]] — particularly [[Definition:Workers' compensation insurance | workers' compensation]] and [[Definition:General liability insurance | general liability]] — the final [[Definition:Premium | premium]] depends on actual exposure data such as payroll or revenue, which is only known after the policy period ends. An auditor reviews the insured's books and records, reconciles reported figures against the estimated exposure used to set the initial premium, and calculates any additional premium owed or return premium due. Beyond premium audits, internal audit teams at carriers evaluate [[Definition:Claims management | claims-handling]] practices, [[Definition:Reserve | reserving]] accuracy, [[Definition:Reinsurance | reinsurance]] recoveries, and compliance with [[Definition:Anti-money laundering (AML) | anti-money laundering]] and [[Definition:Know your customer (KYC) | know-your-customer]] requirements.<br />
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🎯 Robust audit programs serve as both a safeguard and a strategic tool. They catch errors, deter [[Definition:Insurance fraud | fraud]], and surface operational weaknesses before they compound into [[Definition:Solvency | solvency]]-threatening problems or regulatory sanctions. For carriers that rely on distributed networks of [[Definition:Managing general agent (MGA) | MGAs]], [[Definition:Third-party administrator (TPA) | TPAs]], and [[Definition:Insurance broker | brokers]], audit findings directly inform decisions about renewing or restricting authority grants. In the [[Definition:Insurtech | insurtech]] era, technology is accelerating the audit process itself — data analytics platforms can now perform continuous monitoring of delegated portfolios, flagging deviations from underwriting guidelines in near real time rather than waiting for an annual review.<br />
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'''Related concepts'''<br />
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* [[Definition:Premium audit]]<br />
* [[Definition:Delegated underwriting authority (DUA)]]<br />
* [[Definition:Financial examination]]<br />
* [[Definition:Regulatory compliance]]<br />
* [[Definition:Coverholder]]<br />
* [[Definition:Internal controls]]<br />
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