The New York Insurance Department is stepping up its scrutiny of health insurance premium rates, saying it has launched a broad probe into the accuracy of the data used by insurers and health maintenance organizations to request rate increases.
The on-site audits will be of health insurers and HMOs selling health insurance plans regulated by the state. These include health plans sold to small businesses and directly to individuals.
Benjamin M. Lawsky, state Superintendent of Financial Services, said the audits will review selected rate requests that have already been filed.
Insurers will not know beforehand whether their proposals will be the subject of an audit, Lawsky said.
Data regarding claims, insurer administrative expenses, premiums and claims reserves will be examined. The Department will hire a private accounting firm to assist DFS personnel in conducting the audits.
The audit is being financed through a $4.4 million grant won by the DFS in September from the U.S. Department of Health and Human Services.
The grant was among those issued to a number of states to enhance premium rate review, improve public access and lend more transparency to the processes used to establish health insurance premiums.