TO: Members of the Bureau

FROM: L.N. Hannes, President

RE: Uninsured Employers Fund Effective July 1, 1996

Audit Procedures

On September 30, 1996, this Bureau issued General Circular Letter 386,  to advise member companies of the change in the Worker’s Compensation Act relating to uninsured contractors.

It has been brought to our attention that some carriers may not be following proper audit procedures under this law, and it is, therefore, suggested that each member carrier again share the contents of this Circular with those employees responsible for premium audit.

It should also be noted that just as the existence of a certificate of insurance doesn’t automatically mean that remuneration is excluded, the non-existence of a certificate for a subcontractor does not automatically mean that remuneration is included in any audit. The subcontractor may meet the nine statutory criteria to be an independent contractor as defined in Section 102.7(8)(b) Wis Stats., and if evidence is presented to show that the nine test have been met, remuneration for that subcontractor should be excluded from the audit of the contractor’s policy.

Thank you for your assistance in again disseminating this important information.