What is the primary purpose of an insurance "audit"?

The primary purpose of an insurance "audit" is to ensure compliance with regulations and review practices. Audits in the insurance industry are comprehensive evaluations conducted to verify that an insurance company's operations, practices, and policies align with legal requirements and internal standards. This process is crucial to maintain adherence to state and federal regulations, which help protect consumers and ensure the overall integrity of the insurance market.

During the audit, various aspects of the insurer's business practices may be examined, including underwriting processes, claims handling procedures, financial reporting, and risk management strategies. By identifying areas of non-compliance, organizations can enhance their policies, mitigate risks, and ultimately improve their service quality.

The other options, while important, do not reflect the primary objective of an insurance audit. For instance, assessing customer satisfaction levels may occur through client surveys or feedback, but that is not the focus of an audit. Similarly, reviewing claims for payment accuracy or evaluating the financial health of the insurer are important processes but serve different objectives within the broader operational framework of an insurance company. These functions may be part of an audit but do not encompass its primary aim to ensure compliance and review practices.