OSIP Audit Unit


Audit Unit Findings and Performance


One way to measure the need for and the success of the audit unit is to look at the performance and findings of the unit in relation to actual audits that have been performed. 

One of the primary purposes of the unit is to audit self insured employers and their third party administrators (TPAs) to determine if claims reserves are being properly established at the levels are requested by the existing regulations and evolving case law. Where reserves are underreported, this creates a situation where risk or exposure is not identified and in turn captured through establishing collateral security deposits at the appropriate levels.  In effect, this transfers the exposure or liabilities to all of the other self insured employers.  So it is in everyone’s best interest that reserves be correctly established.  The audit also ensures that best practices and requirements in claims administration and benefit payments to injured workers are being timely and appropriately made.  In the instances where claims are being excessively over-reserved, this has the opposite effect of causing the security deposit to be set at a level that is too high which costs the individual self insured employer more by tying up their capital to cover an un-necessarily high security deposit.

The total annualized cost for the operation of the OSIP audit unit is approximately $1 million.  During the past five years (2007 – 2011), the audit unit has identified more than $570 million dollars in under-reported claims reserves.  In other words, for every $1 spent auditing, $114 dollars of under-reported reserves, risk and liability exposure is identified and corrected.

The following link with display audit result findings in a graphically presentation. CLICK HERE.



February 2020