We have an external insurance carrier for employee long term disability benefits that declined employee participation info from our company in order to reconcile employee premiums paid each month to the amount of premium payments our company sends to the carrier. Internal Audit thought this was strange that a company would not want to reconcile payments received to payments due and considered it to be an indication that the insurance carrier may not be focused on internal controls. We compared their decline of premiums due info to a company blindly accepting payments from customers without reconciling to their invoices. We were told that the disability insurance carrier industry considers this internal control weakness for revenue to be an acceptable industry practice, which I find difficult to believe.
Can anyone provide evidence or opinions as to whether or not this internal control weakness is actually an industry wide practice? We believe we are being told that this is an industry standard without adequate knowledge or supporting evidence just to remove this from the audit report and we need to challenge this.