Insurance Designed To Shield Financial Well-being Of Any Entity Be It An Individual
Insurance, in understandable terminology, is a contract that
, by dividing risk among a large number of people, diminishes sufferings from accidents happened to an individual or an organization. In lieu for a premium, the insurer undertakes to pay the insured or a beneficiary a specified amount of money in the event that the insured suffers loss through the occurrence of an event covered by the insurance contract By pooling both the financial contributions and the risks of a large number of policyholders, the insurer is able to absorb losses much more easily than is the uninsured individual. Insurers may offer insurance to any individual able to pay, or they may contract with members of a group, such as employees of a firm, to offer special rates for group insurance. It is now possible to insure almost any kind of property, including homes, businesses, motor vehicles, and goods in transit.Audit refers to an assessment of the proceedings and reports of an enterprise by accounting specialists other than those in charge for their preparation. Public auditing by independent accountants is common in large firms. The auditor performs tests to determine whether the firm's statements are prepared in accordance with acceptable accounting principles and that they fairly present its financial position and operating results. Personal tax audits are carried out to determine whether people have accurately reported their financial circumstances when filing their taxes. Failing such an audit may result in a fine, or, in cases of extensive and deliberate deception, criminal prosecution.
The auditable areas in insurance include Underwriting, Claims and Reinsurance which are more technical in nature. The insurance audit is a process common to the insurance industry. Insurance audit services, provided by certain companies, perform an audit to ensure the buyer of the insurance policy that no more than the appropriate premium for insurance exposure has been paid.
An insurance audit is an examination of an insurance providers operation, records and books of account to discover buyers actual insurance exposure for a specific period of time coverage. The audit is done to obtain insurance rating information only. This information is not used by federal, state or local government to calculate taxes. Insurance audit service providers intend to keep the audit information confidential. This audit is done within 90 days after the expiration date of the policy period so that any premium adjustments may be processed into policy buyers premium billing cycle. Additionally, an insurance company should also include medical/ clinical audit as large percentage of claims depend on authenticity of submitted information with respect to health status of an insurer. A regulatory audit to ensure compliance with medico legal guidelines is also recommended.
The Office of Audit Services (OAS) conducts independent audits, including insurance audit services, of HHS programs and/or HHS grantees and contractors. These audits examine the performance of HHS programs and/or grantees in carrying out their responsibilities and provide independent assessments of HHS programs and operations. These assessments help reduce waste, abuse, and mismanagement and promote economy and efficiency throughout HHS. OAS conducts audits using its own resources and oversees audit work performed by others. OAS is the largest civilian audit agency in the Federal Government. OAS conducts its work in accordance with Government Auditing Standards issued by the Comptroller General of the United States; the Single Audit Act Amendments of 1996; applicable Office of Management and Budget circulars; and other legal, regulatory, and administrative requirements. OAS also provides assistance in criminal, civil, and administrative investigations conducted by OIG's Office of Investigations and the Department of Justice; oversees non-Federal audit activity, including conducting quality control reviews of audits of State and local governments, colleges and universities, and nonprofit organizations; and oversees HHS's annual financial statement audits conducted under the Chief Financial Officers Act and HHS's annual Federal Information Security Management Act audits.
Additionally, an insurance company should also include medical/ clinical audit as large percentage of claims depend on authenticity of submitted information with respect to health status of an insurer. A regulatory audit to ensure compliance with medico legal guidelines is also recommended.
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