When KESA initially underwrites an account, we determine a premium estimate based on a few things - the type of work performed, the amount of payroll, and the company's claims record. Since the type of work and the payroll amounts can change during the policy period, an adequate premium charge is more properly figured at the end of the policy period when the true extent of the actual exposures is known. Therefore, KESA performs a year-end audit on each account at the end of the policy year. Sometimes an audit shows that the member's actual exposures were more than estimated and we bill for the additional premium due, and sometimes an audit reveals that a member's exposures were less than estimated and we issue a refund of premium. By accurately charging our member companies, we can keep our rates very competitive and our administrative costs in check.