OAR 836-043-0130
Selection of Risks for Test Audit

(1) All insurers or insurer groups shall be test audited on a continuous basis. Each quarter, the bureau shall send a list of policies selected for test audit to each insurer’s Oregon policy issuing office or other office designated by the insurer.
(2) The number of policies to be selected for each insurer shall be determined based on the schedule provided in Exhibit 1, using the insurer’s current policy premium distribution, the error rate from the insurer’s previous test audits, and the statewide error rate. The policy premium distribution shall be based on estimated annual standard premium reported by the insurer for policies subject to selection. For each insurer, the error rate shall be the number of policies found to have audit errors divided by the total number of policies test audited during the latest six quarters for the audit types specified in Exhibit 1. The weighted average error rate shall be calculated according to the formula shown in Exhibit 1. The weighted average error rate for the insurer shall be used to determine the policy sample rates in Exhibit 1. The director may order additional focused audits in addition to the required test audits described in Exhibit 1. When ordering additional focused audits, the director shall describe risk factors that required additional review.
(3) The quarterly list of policies selected for test audit shall be randomly drawn from an insurer’s entire book of workers’ compensation business, subject to a maximum premium of $500,000 from the most recent available estimated annual standard premium reported by the insurer and the requirements of section (2) of this rule. The list shall indicate, for each insurer or insurer group, the insured, the policy number, the issuing office (if available) and the policy dates. This list shall only include policies with expiration dates not less than 90 days prior to the date of selection. Unless otherwise requested by the director, this list shall exclude:
(a) Wrap-up policies approved under ORS 737.602 (Authorization for insurance for certain projects) or Sections 1 and 2, Chapter 336, Oregon Laws 1995;
(b) Policies for risks that have been test audited within the five-year period prior to the date of selection;
(c) Policies canceled by either the insured or the insurer prior to the expiration date of the policy; and
(d) Self-insured groups.
(4) Within 45 days after receipt of the selection list, each issuing office shall provide the bureau the following audit material on those risks for which it is responsible:
(a) If an audit is performed, a non-returnable copy of the auditor’s work sheets and the premium invoice;
(b) Correspondence pertinent to proper completion of the audit;
(c) If the insured’s payroll report has been utilized, a copy of the insured’s payroll report and the premium invoice; and
(d) A list of all compensable indemnity claims. The claim listing should also reflect each compensable medical-only claim with reported loss amounts of $5,000 or more. The bureau must receive at least the name of the injured employee and the date of accident, although the following information must also be submitted if available; job title, nature of injury, Basic Manual classification to which claim is assigned, claim file number and a brief description of what the employee was doing when the accident occurred.
(5) At least 10 days before the test auditor’s planned date of call, the auditor must inform the insured in writing of the planned date of call.
(6) The written notice required by section (5) of this rule must include certain information. An example of acceptable written notice is located on the Department of Consumer and Business Services, Division of Financial Regulation website at dfr.oregon.gov. The notice must include the following information:
(a) Identification of the insurer, the insured, the policy number, and the policy period being audited;
(b) The scheduled date and time of the test audit;
(c) Explanation of the test audit program and the statutory authority to conduct test audits;
(d) Identification of the bureau responsible for conducting the test audit;
(e) Explanation of the bureau’s authority under the policy to examine the insured’s records;
(f) Explanation of the types or specific records the insured must make available to the auditor; and
(g) Contact information for the auditor.
(7) The bureau shall complete the test audits within six months of receipt of the insurer’s audit information. The director may request the bureau to provide a quarterly report of test audits that are not completed in a timely manner.
(8) The following must be obtained from bureau files:
(a) A policy data sheet providing all necessary information shown on the insurer’s policy; and
(b) A copy of the latest bureau inspection.
[ED. NOTE: To view attachments referenced in rule text, click here to view rule.]

Source: Rule 836-043-0130 — Selection of Risks for Test Audit, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=836-043-0130.

836‑043‑0001
Statutory Authority 836‑043‑0005
Definitions for the Workers’ Compensation Insurance Plan 836‑043‑0009
Participation by Insurers and Insurance Producers 836‑043‑0017
Plan Administrator 836‑043‑0021
Servicing Carriers 836‑043‑0024
Right to Apply 836‑043‑0028
Application by Electronic Transmission or Telephone 836‑043‑0032
Nonelectronic Application 836‑043‑0034
Surety Bonds 836‑043‑0041
Application Review 836‑043‑0044
Binding Coverage 836‑043‑0046
Rates and Forms, Policy Term, Additional Coverages and Other Provisions 836‑043‑0048
Additional States’ Coverage 836‑043‑0050
Interstate Assignments 836‑043‑0053
Premium Obligations 836‑043‑0056
Insurer Cancellation and Nonrenewal of Workers’ Compensation Insurance Policies or Surety Bonds 836‑043‑0060
Assignment Formula 836‑043‑0062
Issuance and Continuation of Policy 836‑043‑0064
Renewal, Nonrenewal 836‑043‑0066
Reassignment 836‑043‑0068
Cancellation 836‑043‑0071
Dispute Resolution Procedures 836‑043‑0072
Voluntary Coverage 836‑043‑0076
Takeout Credit 836‑043‑0079
Notification of Outstanding Premium 836‑043‑0082
Policyholder Services 836‑043‑0087
Producer Changes and Compensation 836‑043‑0089
Confidentiality of Information 836‑043‑0091
Self-Funded Plan 836‑043‑0101
Statutory Authority 836‑043‑0105
Definitions 836‑043‑0110
Insurer Premium Audit Program 836‑043‑0115
Insurer Audit Procedure Guide 836‑043‑0120
Minimum Standards of Insured Education Program 836‑043‑0125
Purpose 836‑043‑0130
Selection of Risks for Test Audit 836‑043‑0135
Test Audits 836‑043‑0145
Disposition of Test Audits 836‑043‑0150
Summary of Test Audit Results 836‑043‑0155
Test Audit Standards 836‑043‑0165
Monitoring Audit Program System 836‑043‑0170
Premium Audit Hearings 836‑043‑0175
Statutory Authority 836‑043‑0180
Definitions 836‑043‑0185
Insurer Classification Notice 836‑043‑0200
Statutory Authority 836‑043‑0210
Definitions 836‑043‑0220
Committee Participation 836‑043‑0230
Committee Operating Rules 836‑043‑0240
Committee Activities 836‑043‑0300
Qualifications for Workers’ Compensation Rating Oganizations 836‑043‑0310
Exchange of Data Among Workers’ Compensation Rating Organizations 836‑043‑0320
Competitive Selection Process
Last Updated

Jun. 8, 2021

Rule 836-043-0130’s source at or​.us