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Which NCCI classification code is most commonly used for clerical office employees on a Workers Compensation premium audit?

8810

8742

8868

5403

to track

2026 Statistics

Key Facts: APA Exam

6 exams

APA Designation Requires

The Institutes APA program

70%

Passing Score

All APA course exams

~$2,500

Total Exam Fees

$415 x 6 courses

200-300 hrs

Total Study Time

Recommended for APA

12 months

Audit Completion Window

NCCI guidance after policy expiration

1/3 or 1/2

Overtime Premium Portion Excluded

NCCI Basic Manual

The APA designation requires passing 6 course exams from The Institutes — APA 320 (Understanding Premium Auditing), APA 321 (Auditing Premiums for Insurance Products), an Ethics course, and additional foundation/elective course tests. Each exam is approximately 2 hours, requires 70% to pass, and costs around $415 per course (about $2,500 total). The credential is the recognized industry standard for premium auditors at insurance carriers and at independent firms such as NIPA-affiliated audit shops.

Sample APA Practice Questions

Try these sample questions to test your APA exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Which NCCI classification code is most commonly used for clerical office employees on a Workers Compensation premium audit?

A.8810

B.8742

C.8868

D.5403

Explanation: NCCI Class Code 8810 (Clerical Office Employees NOC) applies to employees whose duties are confined to keeping books, records, conducting correspondence, or other office work where books and records are kept. It is the lowest-rated standard exception class and is strictly defined by the NCCI Scopes Manual.

2On a Workers Compensation audit, how is the 'premium portion' of overtime pay treated?

A.Included in full as payroll

B.Excluded from payroll

C.Capped at 50% of regular wages

D.Treated the same as bonuses

Explanation: The NCCI Basic Manual rule on remuneration excludes the premium (extra) portion of overtime pay. Only the straight-time (regular hourly) portion is included as audited payroll. For time-and-a-half, the extra one-third is excluded; for double time, the extra one-half is excluded.

3Which NCCI classification applies to an Outside Salesperson who travels away from the employer's premises soliciting orders?

A.8810 Clerical

B.8742 Salespersons - Outside

C.8748 Automobile Salespersons

D.9012 Real Estate Agency

Explanation: Class 8742 (Salespersons or Collectors - Outside) is a standard exception classification under the NCCI Scopes Manual that applies to employees engaged primarily in soliciting orders, collecting accounts, or making deliveries away from the employer's premises. It is one of the four standard exceptions along with 8810, 8871, and 7380.

4When auditing a carpentry contractor with no specialty, which NCCI class code generally applies to its field employees?

A.5403 Carpentry NOC

B.5645 Carpentry - Detached Dwellings

C.5437 Carpentry - Installation of Cabinets

D.5022 Masonry NOC

Explanation: Class 5403 (Carpentry NOC - Not Otherwise Classified) applies to commercial carpentry work that is not specifically described by another carpentry class such as 5645 (detached dwellings) or 5437 (cabinet installation). The NCCI Scopes Manual outlines the specific scope of each carpentry class and how to assign them.

5A college employs a salaried full-time professor. Which NCCI class code generally applies?

A.8868 College: Professional Employees & Clerical

B.9101 College: All Other Employees

C.8810 Clerical Office Employees NOC

D.9079 Restaurants NOC

Explanation: Class 8868 (College: Professional Employees and Clerical) applies to professors, instructors, deans, and clerical staff at colleges and universities. Class 9101 covers other (non-professional) employees of the college such as maintenance and food-service workers. Both are governing class codes within the schools group of the NCCI Scopes Manual.

6Which item is generally INCLUDED as remuneration on a Workers Compensation premium audit?

A.Employer contributions to a qualified pension plan

B.Severance pay

C.Production bonuses

D.Tips received directly from customers

Explanation: Production bonuses and other forms of incentive compensation paid to employees are included as remuneration under the NCCI Basic Manual. Employer contributions to qualified plans, severance pay, and tips paid directly by customers are typically excluded from auditable payroll.

7How is sick pay paid by the employer typically treated for Workers Compensation premium audit purposes?

A.Always excluded from payroll

B.Included in payroll

C.Included only if paid by a third-party administrator

D.Capped at the state weekly maximum

Explanation: Employer-paid sick pay is generally included in remuneration for Workers Compensation premium audit purposes under the NCCI Basic Manual. Sick pay paid by a third-party administrator (such as an insurer) is typically excluded because it is not wages from the employer to the employee.

8An executive officer's actual annual salary exceeds the NCCI state-approved maximum payroll. How should the auditor handle this on the Workers Compensation audit?

A.Use the actual full salary

B.Cap payroll at the state-approved maximum

C.Exclude the officer entirely

D.Cap payroll at 50% of actual salary

Explanation: NCCI publishes minimum and maximum payroll amounts by state for executive officers covered for Workers Compensation. When the officer's actual remuneration exceeds the state maximum, the auditor caps the payroll at that maximum. If it falls below the minimum, the auditor uses the minimum.

9Which best describes the 'governing classification' on a Workers Compensation policy?

A.The standard exception with the most payroll

B.The classification with the highest rate

C.The classification, other than a standard exception, that produces the largest amount of payroll

D.The first classification listed on the declarations

Explanation: Under the NCCI Basic Manual, the governing classification is the classification, other than a standard exception (such as 8810, 8742, 8871, 7380), that produces the largest amount of payroll. Identifying the governing class is important for assigning miscellaneous employees and applying certain rules.

10A subcontractor on a construction job cannot provide a current Workers Compensation certificate of insurance. How should this be handled on the audit of the general contractor?

A.Ignore the subcontractor's payroll

B.Include the subcontractor's payroll under the appropriate construction classification of the general contractor

C.Charge the subcontractor's payroll at class 8810

D.Add a 25% surcharge to the general contractor's payroll

Explanation: Under the NCCI Basic Manual, when an uninsured subcontractor performs work for a general contractor, the subcontractor's payroll (or, if not available, the total contract amount minus material) is included in the general contractor's audit under the appropriate construction classification. Verifying valid certificates of insurance is a key audit step.

About the APA Exam

The Associate in Premium Auditing (APA) is The Institutes' professional designation for premium auditors who verify final premium on Workers Compensation, General Liability, Garage, and other audit-rated commercial policies. The program covers NCCI Scopes Manual classifications, payroll inclusions and exclusions, ISO General Liability premium bases, audit process and methodology, the insured's books and records, and the ethics of premium auditing. APA holders perform the technical work that determines billions of dollars of final premium each year for the property-casualty industry.

Questions

100 scored questions

Time Limit

2 hours

Passing Score

70%

Exam Fee

$415 per course (~$2,500 total — 6 exams) (The Institutes)

APA Exam Content Outline

30%

Workers Compensation Premium Audit

NCCI Scopes Manual classifications (8810 Clerical, 8742 Outside Sales, 5403 Carpentry NOC, 8868 College Professional, etc.), governing classification rules, payroll inclusions/exclusions including overtime premium portion treatment, executive officer minimum/maximum payroll, sole proprietor and partner elections, uninsured subcontractor inclusion, and the experience modification factor.

20%

General Liability Premium Audit

ISO Commercial Lines Manual classifications and premium bases — gross sales, payroll, units, area (per 1,000 sq ft), admissions, and total cost. Sales exclusions for taxes, returns, finance charges, and intercompany transfers. GL executive officer payroll caps and contractor payroll rules.

15%

Audit Process and Methodology

Audit planning and pre-audit checklists, audit types (physical, voluntary mail, phone, estimated), reconciliation of payroll to the general ledger and to federal Form 941/W-3, verifying classifications by observing operations, audit narratives, exit conferences, and quality control.

15%

Insured's Books and Records

Chart of accounts, general ledger, payroll registers, sales journals, accounts receivable subsidiary ledgers, accrual vs cash basis accounting, fiscal-year vs policy-period allocation, federal and state tax forms, and the assurance levels of compiled, reviewed, and audited financial statements.

10%

Garage, OCP, Liquor Liability and Other Audit-Rated Coverages

ISO Garage Coverage Form classes for franchised and used dealers and service operations, Garagekeepers ratings, Owners and Contractors Protective (OCP) liability, liquor liability rated on alcohol receipts, contractor's equipment inland marine, and unit-based audit-rated coverages such as apartments, hotels, and pools.

Audit Compliance, Recordkeeping and Disputes

NCCI Workers' Compensation Statistical Plan reporting, audit completion deadlines (generally 12 months from policy expiration with state variation), audit dispute and re-audit procedures, work paper retention, the NCCI Test Audit Program, and corrections favoring either party.

Ethics and Compliance

The Institutes' Code of Professional Ethics, fraud handling protocols, confidentiality and data-protection obligations, conflict-of-interest rules including gifts from insureds, and continuing professional development requirements for designation maintenance.

How to Pass the APA Exam

What You Need to Know

Passing score: 70%
Exam length: 100 questions
Time limit: 2 hours
Exam fee: $415 per course (~$2,500 total — 6 exams)

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

APA Study Tips from Top Performers

1Study the NCCI Scopes Manual descriptions for the most commonly tested codes (8810, 8742, 8871, 7380, 5403, 5645, 9079, 8868) — APA tests phraseology recognition, not just numbers

2Memorize the payroll inclusions/exclusions list cold — overtime premium portion (extra 1/3 or 1/2), bonuses, employer benefits, severance, and tips paid by customers all have different audit treatments

3Practice the NCCI overtime calculation by hand: total gross minus the premium portion of overtime equals auditable payroll. Several APA exam questions are math-based reconciliations

4Learn the GL premium bases by classification family (retail/wholesale = sales, manufacturing = payroll, apartments = units, offices = area, theaters = admissions, contractors = total cost)

5Understand executive officer minimums and maximums, sole proprietor and partner elections, and how 1099 contractor payments flow through the audit when certificates are missing

Frequently Asked Questions

How many exams are required for the APA designation?

The Associate in Premium Auditing requires passing 6 national exams from The Institutes — including APA 320 (Understanding Premium Auditing), APA 321 (Auditing Premiums for Insurance Products), and an Ethics requirement. Two of the six are course tests for foundation material. Most candidates complete the program in 18-24 months while working as a premium auditor.

What is the passing score for APA exams?

All APA course exams require 70% to pass. Each exam is approximately 2 hours, delivered through The Institutes' virtual testing platform. Candidates who fail can retake within the same testing window for a discounted fee per The Institutes' standard retake policy.

How much does the APA designation cost?

Each APA course exam costs approximately $415, bringing the total exam fees to about $2,500 for all 6 courses. Additional costs include study materials and optional self-study packages from The Institutes. Many premium auditing employers (carriers and NIPA-affiliated firms) offer tuition reimbursement for APA candidates.

What is the NCCI Scopes Manual and why does APA test it heavily?

The NCCI Scopes of Basic Manual Classifications (Scopes Manual) is the authoritative reference describing every Workers Compensation classification used in NCCI states. Premium auditors apply Scopes phraseology daily to assign correct class codes and split payroll. APA exams test knowledge of standard exceptions (8810, 8742, 8871, 7380), governing classifications, and major construction/manufacturing class codes.

Are APA exams harder than state insurance licensing exams?

APA exams are significantly more technical than state property-casualty licensing exams. They require working knowledge of NCCI Basic Manual rules, ISO Commercial Lines Manual classifications, accounting fundamentals, and audit methodology. Recommended study time is 40-60 hours per course, totaling 200-300 hours for the full designation.

What career benefits does the APA designation provide?

APA is the recognized credential for premium auditors at insurance carriers and at independent audit firms (many NIPA-affiliated). Designees typically advance to senior auditor, audit team leader, or premium audit manager roles. The credential pairs naturally with CPCU and AU-Underwriting for broader property-casualty career growth.