A systematic review of an insurance policy or program, undertaken by an insurer or an independent entity, examines various aspects of the coverage. This examination verifies the accuracy of premiums paid, confirms compliance with policy terms, and assesses the effectiveness of risk management strategies. For instance, a construction companys workers’ compensation policy may be scrutinized to ensure the payroll reported aligns with actual wages paid to employees, thus affecting the premium calculation.
The value of such a review lies in its ability to identify potential discrepancies and improve overall program efficiency. It can reveal instances of overpayment or underpayment of premiums, leading to financial adjustments. Historically, these assessments have evolved from simple premium verification procedures to comprehensive evaluations of risk profiles and loss control measures, reflecting a greater emphasis on proactive risk management and cost containment within the insurance industry.
