NCCI conducts a Classification Inspection Program in all NCCI states as a part of its ongoing core services. NCCI’s Classification Inspection Program monitors the accurate and consistent application of the rules and classification system by
- providing inspections of current classification code utilization, which ensures that the classification of selected insureds' current business operations conforms with NCCI manual rules and classifications
- providing feedback to employers, carriers, and regulators on inspection results
- providing support of classification filings made on behalf of NCCI affiliates for state regulatory approval, and
- validating the classification system, which may be affected by a continually changing business environment and NCCI item filings.
NCCI's Authority to Inspect
NCCI’s authority to conduct classification inspections is outlined in NCCI’s Workers Compensation and Employers Liability Policy (WC policy) and in NCCI’s
Basic Manual for Workers Compensation and Employers Liability Insurance (Basic Manual).
- The WC policy includes a clause that provides that the carrier and insurance rate service organizations have the right to inspect the policyholder’s workplace at any time.
- NCCI’s
Basic Manual states that NCCI has the right to inspect operations, assign classifications, determine if classifications have been appropriately assigned, and determine if rules have been appropriately applied.
Inspection Types and Methods
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Classification Quality Assurance Inspections (CQAs)—NCCI uses a statistically credible sample size based on selected criteria to sample the market and ensure that the classification codes assigned on a policy accurately reflect the business operations.
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Special Inspections—Carriers, policyholders, and other customers can request an NCCI inspection for a fee when they need assistance with classifying a new business, confirming the accuracy of the classification, or resolving a classification disagreement.
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Physical and Virtual Inspections—NCCI conducts both physical and virtual inspections. Generally, physical inspections are performed for Special Inspections and where required in the jurisdiction.
Inspection Process
Notify
The NCCI inspector notifies the policyholder and carrier by letter or email to set an appointment date for the inspection.
Conduct
The inspector reviews the business operations with the policyholder contact and gathers information about the type of work being conducted, processes, materials, equipment, products, subcontracted and other special operations, and the number of employees performing the work.
Report
The inspector’s report describes the operations, breaks down the head count by department, and addresses any potential special operations. It also explains any changes in classification citing the applicable
Basic Manual rules.
Review
Various inspection reports are quality reviewed by NCCI to ensure operational details are complete and the report conclusions are supported by filed rules and classification.
Distribution
Inspection reports that result in a classification code change are emailed to the carrier to review with their policyholder. The policyholder or agent of record may also obtain a copy from the carrier, through a request to NCCI’s Customer Service Center, or by using the
Riskworkstation™ tool on
ncci.com.
Follow Up
NCCI follows up with the carrier to
- ensure required policy corrections are submitted by the carrier
- determine if the experience rating modification can be revised, and
- verify the accuracy of the corresponding unit report.
If the carrier changes during this process, NCCI follows up with the new carrier as the inspection report remains associated with the policyholder.
