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Occupational Illness Rates by Industry – Great BLS Data Surprising Results

April 16, 2019 By JL Risk Management Consultants Leave a Comment

2017 Bureau of Labor Statistics Occupational Illness Rates by Industry – Surprising

Workers; Compensation Illness by Industry Rates shows which industries had the highest rates of occupational illness.

Occupational illnesses are defined by the BLS as:

BLS considers an occupational illness to be any abnormal condition or disorder—other than a case resulting from an instantaneous event or exposure—that is caused by an exposure to factors associated with employment.

Please note this does not include injuries by accident. The subject becomes convoluted as some states workers’ compensation systems consider some illnesses to be accidents and vice-versa. For now, let us stick with the BLS definition.

The table below comes from the BLS’s most recent release. Yes, the data covers a year in the past. However, the numbers have such a breadth and depth that lagging behind one year would be expected for such a massive data collection and reporting task. Compiling and stratifying the data must be quite an enormous undertaking.

The Occupational Illness by Industry Rates Table

The BLS table ranks the Top 20 as:

Top 20 Illness Rates
Light truck and utility vehicle manufacturing (Private industry)	233.1
Animal (except poultry) slaughtering (Private industry)	199.2
Automobile manufacturing (Private industry)	131.8
Police protection (State government)	93.7
Farm management services (Private industry)	89.6
Glass container manufacturing (Private industry)	87.4
Beet sugar manufacturing (Private industry)	85.5
Seafood product preparation and packaging (Private industry)	83.1
Dried and dehydrated food manufacturing (Private industry)	82.0
Amusement and theme parks (Private industry)	81.2
Meat processed from carcasses (Private industry)	81.1
Correctional institutions (State government)	81.0
Nonferrous forging (Private industry)	79.9
Ambulance services (Private industry)	78.4
Poultry processing (Private industry)	77.6
Aircraft manufacturing (Private industry)	76.0
Footwear manufacturing (Private industry)	70.5
Soil preparation, planting, and cultivating (Private industry)	69.6
Motor home manufacturing (Private industry)	69.3
Iron foundries (Private industry)	68.6
Polish and other sanitation good manufacturing (Private industry)	59.2
Ship building and repairing (Private industry)	57.9
Metal can manufacturing (Private industry)	57.0
Motor vehicle gasoline engine and engine parts manufacturing (Private industry)	54.4
Hospitals (Local government)	53.8

Please note that I excluded the NAICS numbers. The formula for figuring out these BLS-calculated rates is:

The incidence rates represent the number of illnesses per 10,000 full-time equivalent workers and were calculated as: (N/EH) x 20,000,000, where N = number of illnesses EH = total hours worked by all employees during the calendar year
20,000,000 = base for 10,000 equivalent full-time workers (working 40 hours per week, 50 weeks per year)

The BLS included only higher rate industries. As a statistics person, I would say that is a great cut-off point. Any industries with less than 500 recordable cases were excluded to remove any skewing by small data sets. The data sets were categorized using the NAICS system.

The comparison also excluded farms with fewer than 11 employees.

Examining The Table

The industries that stood out as ones with surprisingly high illness rates:

Glass container manufacturing
Beet sugar manufacturing
Dried and dehydrated food manufacturing
Amusement and theme parks
Footwear manufacturing

I will check with our OSHA Consultant Glen on why those industries have higher rates. Approximately 10 years ago, I looked at the same information. As I remember, hospitals were the number one public entity illness exposure.

Welding is one job task that always seems to cause a higher rate of illness.

Filed Under: injury rate

California Dynamex Decision – Another Workers Comp Crisis Recycled?

April 4, 2019 By JL Risk Management Consultants

California Dynamex Decision – Overreaction or Harsh Reality?

The California Dynamex decision hit the Workers Compensation airwaves and blogosphere over the last few weeks.

picture of agreement California dynamex decision signing

Public Domain – US DOE

An article by WorkCompCentral noted reactions across the country. I cannot link to the article as it is behind a paywall.

Check out this article on the previous recycled crises – no, this one is not counted as a recycled crisis yet. A great article by Tony Marks in Forbes Magazine covered the case very well – more from a franchising perspective.

The California Supreme Court retooled the contractor-subcontractor relationship into three points of consideration: (distilled for brevity)

The degree of control by the main contractor
The subcontractor performs work that is not the usual work performed by the contractor
The subcontractor has a business that is independently established in the same trade from the contractor
I added in this one as carriers are now including it in their workers’ comp audits – the subcontractor is not integral to the contractor’s existence.

Bullet point #4 was added by me as this question has been asked of me by a few California companies that have recently gone through the premium audit process.

The case of Curry v. Equilon Enterprises, LLC (2018) (CA Court of Appeals) limited the four tests in the area of joint employment. The link takes you to a search for the case.

IRS Has Great Tests for Subcontractor vs Employee

The Internal Revenue Service has a great test that still satisfies most of the concerns when deciding on whether a worker is a subcontractor or employee. The IRS has more worker classifications such as Statutory Employee, Non-StatutoryEmployee, and even a governmental employee.

Yes, I realize it may not fit every state. The three tests are:

Behavioral Control
Financial Control
Relationship of the Parties – contracts are important

A great PDF from the IRS can be found at this link. The PDF breaks the three elements down even further. Of course, discussing everything with your tax professional is always recommended by the IRS. The California Dynamex decision should be a conversation starter.

One area from the PDF that I had not covered was the test the IRS gives when doing an employee audit. They are:

Consistency test – everyone that has the same job type is paid as a subcontractor
Reasonable basis test – this one needs to be covered in the same manner as the IRS

In order to meet the reasonable basis test, you must have treated the worker as a subcontractor because you reasonably relied on:
· a court case or ruling to support your position,<<interesting statement
· a prior IRS audit,
· a long-standing practice in your industry, OR
· demonstrate, in some other manner, any other reasonable basis for treating the worker as a subcontractor

Tennessee Says 20 Point Test

According to Business Insurance Tennessee wants to have a 20 point test that was established by the IRS. I do not see 20 points in the IRS websites. The Legislature may be counting even the test subsets as a test.

Tennessee referring to the IRS test may be seen as a good sign for consistency. The IRS standard may be the best method for considering whether a subcontractor is not an employee, regardless of the Calfornia Dynamex decision.

Bottom line – even before the California Dynamex decision, the states and Feds started enforcing the contractor rules more stringently.

Filed Under: California

Workers Comp Data Carveouts Move Data To Dangerous Ground

April 4, 2019 By JL Risk Management Consultants

Workers Comp Data Carveouts – Are You Guilty of Sampling Errors?

The concept of Workers Comp data carveouts surfaces more now that employers look to enhance their workers’ compensation saving programs.

picture of sampling workers comp data slicing

Wikimedia-DSCF1348

Workers comp data carveouts start when a company, organization, consultant, etc. decide to use oversampling of a small set of data to justify a larger set. The reverse will work under certain circumstances.

For example, and I have seen this happen often – using California data results on any kind of workers comp statistics to think that the same result will occur in another state.

I often do phone consulting for investment companies that are looking to place the work in the workers’ compensation space. The investors will want to look at two or three different states and then use the results derived from those states to try to expand their investing across the US.

I do not use Wikipedia that often as a source. Two sentences were taken from their page on oversampling/undersampling.

Both oversampling and undersampling involve introducing a bias to select more samples from one class than from another, to compensate for an imbalance that is either already present in the data, or likely to develop if a purely random sample were taken.

Many articles appear on this website concerning statistical madness. Sampling errors can be a form of statistical madness.

The Whole Picture

Many software packages do allow companies to isolate one state when examining a Mod calculation. Isolating one state can be Ok to look at just that one state. The mistake is made when a single state company wishes to expand to other states using the data from their HQ state.

Workers’ Compensation rating contains too many variables to think that how your company is rated in one state will allow your company to know what would happen data-wise in another state. Most E-Mod formulas have 33 calculations to arrive at the final number.

An employer would need to operate in the additional states for a few years before the actual results are known – remember that Workers Comp is a delayed lookback system.

If an employer is operating in multiple states but looks at one or two of their main operational states as the bellwether for other states, they would be oversampling and undersampling at the same time. The main operational states would be oversampled and the remaining states would be undersampled to the point of not being sampled at all.

I left the link above in the Wikipedia statement on bias. Bias in statistics leads to unnatural and inaccurate results. I have actually sliced out sections of data as the employer wanted that section to be analyzed. I did not guarantee the results as being a good forecast.

Workers Comp data carveouts usually occur when analyzing one state, a year or other data out of any analysis – mainly the Experience Modification Factor or Loss Development Factor (LDF). One needs to look at the whole picture.

Bottom line – be very careful when using workers comp data carveouts for decisions.

Filed Under: statistics Tagged With: Carveouts, lookback

Workers Comp Physician Networks Importance Reaches Critical Mass

March 28, 2019 By JL Risk Management Consultants

Workers Comp Physician Networks Now More Critical to Cut Comp Costs

One of the Six Keys or Secrets to cut your work comp costs becomes even more important now due to a fact covered later in this article. Workers Comp physician networks are a great risk management technique that involves little cost and a little effort to put in place.

pic of workers comp physician networks IV bag

Wikimedia – Smokefoot

I wrote the Six Keys as Four Keys that I saw as important when adjusting claims in 1988. I then added two more as time passed and I was exposed to more workers comp reading material – thanks Interweb.

Workers Comp physician networks became your go-to way as an employer after safety. Yes, the old boring slogan – the least costly accident is the one that never happens- remains the best way to cut your workers comp costs.

I have given the presentation at least 25 times on how I picked up a file from a suddenly unemployed adjuster. Reviewing the file was a shocker as the main treating physician was a biofeedback specialist (nothing against those practitioners). When I show a diagram of an out-of-control medical treatment network, many mouths open wide in astonishment. A $400 claim turned into a $745,000 claim due to no medical treatment network.

Setting up the Network – Quick Primer

One main consideration to cover is where the injured employee should treat in the general vicinity of their workplace. A physician’s office must communicate well. Treating physician communication covers:

Sending timely medical reports and bills
Answering claims adjuster inquiries
Understanding the job description for a return to work
Communication with rehabilitation nurse (if assigned)
Referring to a second-level physician in the network (if necessary) – (i.e.) Orthopaedic Surgeons, etc.
In emergency situations, medical treatment networks should be ignored
The best person on earth to ask about immediate great medical treatment – the claims adjusters.

Adjusters who are reading this will add in at least a few more bullet points.

Salient Point On States With Employee Choice of Care

Some states do not allow direction of medical treatment whether by a panel or directed by the employer. Most studies have shown that injured employees will actually still see an employer-recommended physician even if they can choose the medical provider.

I apologize for not sourcing those studies.

Why Is A Workers Comp Physician Network Critical Now?

WCRI, NCCI, WCIRB, any of the independent rating bureaus, and many studies have pointed out a very major fact which is:

# of claims severely decreasing – good news
Cost of claims severely increasing – bad news for risk per claim

Check slides 23 and 24 of this NCCI presentation that I attended last year. These are national figures. You may want to read the whole group of slides. It will be worth your time.

https://www.ncci.com/Articles/Documents/II_StateAdvisoryForumState_SC_2018.pdf

The average claim according to a WCRI nationwide study was $42,000+. When an employee reports an injury to their respective employer, the time to take action is RIGHT THEN. The employer at that time needs to:

Direct medical care to your network or;
Offer a panel is states that require a panel or;
Recommend a physician in states where the employee can those their medical treatment

Each claim now impacts your E-Mod or budget (self-insureds) more every policy year. Self-insureds are paying more per claim directly out of a budget.

Bottom Line – Controlling medical costs upfront by referring an employee to a trusted industrial-minded physician cut your work comp costs dramatically. With the number of claims decreasing, an opportunity to control losses may not as often come an employer’s way as in the past.

Filed Under: Risk Management

IRS Subcontractor Section Update Adds Government Employees

March 28, 2019 By JL Risk Management Consultants

Updated IRS Subcontractor Section – Great Subcontractor vs. Employee Status Rules

Last month, the IRS Subcontractor Section was updated with new information. As promised, the IRS updates to these pages will appear in this blog as I find them.

For premium audits, make sure that all subcontractors are noted so the premium auditor does not mix them with your employees. We have seen this situation occur quite a few times. We receive calls and emails often after subcontractors were counted as employees at the workers comp audit that occurred within the last few days.

One area which was added to the page was a consideration that a hiree may be classified as a government worker. If your company hires a subcontractor even occasionally, then you should bookmark this link

The IRS Subcontractor section has great information when making a determination on the status of an employee/contractor when you hire them. The Government Worker Section is new to the page. The new page that covers Government workers is below this paragraph.

Each state has its own determinations on what to consider when making the determination between employee, contractor, or other types of workers.

Tax Withholding for Government Workers

In most cases, individuals who serve as public officials are government employees. Therefore, the government entity is responsible for withholding and paying Federal income tax, social security and Medicare taxes. They must also issue a Form W-2, Wage and Tax Statement, to a public official. These facts and relevant examples are discussed in detail in Publication 15-A, and on the Independent Contractor or Employee? page.

Public Officials, Elected Officials and Public Officers

Internal Revenue Code section 3401(c) indicates that an “officer, employee, or elected official” of government is an employee for income tax withholding purposes. However, in some special cases the law or a Section 218 Agreement may specify otherwise.

The courts generally define “public official” and “public officer” to mean anyone who exercises significant authority pursuant to public laws. This includes any official who administers or enforces public laws whether the public elected the individual or an office appointed them.

Regulations for section 1402, addressing the applicability of self-employment tax, indicate that performance of the functions of a public office does not constitute a trade or business. Therefore, holders of “public office” are not subject to self-employment tax. An exception applies for certain public officials paid solely on a fee basis (see below). All other holders of public office, paid on a salary basis, are excepted from self-employment tax and are presumed to be employees receiving wages.

Definition of “Public Office”

The following facts indicate that an office is a “public office”:

The constitution, legislation, or a municipality or other body with authority conferred by the legislature created the office
The office was delegated a portion of the powers of a government body
Legislative authority or law defined, either directly or indirectly, the powers conferred and the duties to be discharged by the office

Section 218 Agreement Common-law rules

Government Worker Classification
The office performs its duties independently and without control of a superior power other than the law
The office has some permanency and continuity
The officer takes an official oath

Examples of public officers include:

President and the vice president
Governor or mayor
Secretary of state
A member of a legislative body such as a state legislature, county commission, city council, school board, utility or hospital district
A judge, a justice of the peace, a county or city attorney, a marshal, a sheriff, a constable and a registrar of deeds
Tax collectors and assessors
Members of advisory boards and committees like boards of education, water boards and other boards and commissions

If there is not any authority in a public law to hire or elect an individual to fill a position, a determination must be made about the employment status of that position under the general common-law rules.

Fee-Basis Officials

A fee-basis public official receives and retains remuneration directly from the public. This work is considered self-employment under IRC 1402(c)(2)(E) and these individuals are not employees with respect to this work. An official who receives salary, even if it’s called “fees,” is a common-law employee and is subject to social security and Medicare withholding. Fee-basis public officials are subject to self-employment tax.

A position compensated by salary and fees is considered a fee-basis position if the fees are the principal source of compensation, unless a state law provides that a position for which any salary is paid is not a fee-basis position. A Section 218 Agreement may provide an exclusion from social security tax for individuals.

Emergency Workers

Individuals hired on a temporary basis in case of fire, storm, snow, earthquake, flood or other emergencies are excluded from social security and Medicare under IRC 3121(b)(7)(F)(iii). This does not include permanent employees, both full time and part time, who work regularly in response to emergencies; these individuals are subject to social security and Medicare if they are common-law employees.

Election Workers

Election workers are common-law employees; however, under IRC 3121b)(7)(F)(iv) an exception from FICA is provided for election officials and workers who earn less than a specified amount for a calendar year ($1,700 for 2016). See Election Workers: Reporting and Withholding for details and relevant examples.

Medical Residents

Most medical residents meet the tests to be common-law employees and are therefore employees of the hospital where they work. However, under IRC 3121(b)(10), enrolled students who work less than full-time and for whom education, not employment, is the primary purpose of the relationship, may be excepted from FICA. See Internal Revenue Bulletin: 2005-2 .

Refer to Publication 963 (PDF), Federal State Reference Guide for details on Section 218 Agreements and all classes of workers mentioned above.

Filed Under: IRS

Rate Bureau Calculations Using WCRI Numbers Show Mod Increases

March 21, 2019 By JL Risk Management Consultants

Using Rate Bureau Calculations on WCRI’s Data – Whew!

Most Rate Bureau calculations make people daydream or roll their eyes back in their heads just before they start to drift off to sleep. I have concocted a few statistics using WCRI’s astute statistics and WorkCompCentral’s great data analysis.

rating bureau calculations mad scientist graphic

Public Use License – JJ

WCRI (Workers Compensation Research Institute) published a plethora/cornucopia of data at their annual conference in Phoenix. Elaine Goodman from WorkCompCentral wrote an article on March 18, 2019.

The article had a few interesting numbers in it when Elaine extracted out the data.

I cannot link you to the article as it is behind a paywall. I think WorkCompCentral provides some of their articles gratis.

The WCRI data – OVERALL AVERAGE – was $42,000 per Workers Comp claim. Elaine’s article pointed out that 15% of the expenses were for benefit delivery.

The rule for Experience Modification Factors (E-Mods X-Mods) cuts out any expense beyond medical or indemnity payments. So let us use a little multiplication. $42,000 * .85 = $35,700.

$35,700 – on the average- would be included in most of the Mod calculations for each claim.

Primary and Excess Loss Rate Bureau Calculation

Most states have 15,000 as the Primary loss part of the claim. Some states have a higher primary loss figure.

So -the 15,000 Primary Loss part of the claims would be included in an average claim with $20,700 as the Excess Loss. Hang with me here.

$15,000 Primary Loss – where your company’s Mod gets no discount
$20,700 Excess Loss – the discounted part of the claim (in a way)

The Primary Loss goes directly into your E-Mod equation. The Excess Loss has a discount of .75, so 20,700 *.25 = $5,175.

In the average claim, the primary loss maximum is reached at $15,000. The average Primary + Excess Loss = $20,175.

The Rate Bureau calculations have such things as the ballast to make sure your company does not get hit with the full Mod increase.

Self Insureds Have No Calculation (Then again)

Self insured employers have no calculation as they are outside of the Rating Bureau calculation. Hold on, though as they still have to pay the whole $42,000. Paying $42,000 out per lost time claim could heavily affect the self insured employers budgeting process.

Bottom Line If Confused By Above Figures

The average claim whacks your Mod figures by hitting your company with a $15,000 full bore and then another $$5,175. If that does not cause you to think about increasing your safety efforts, nothing will. Trying to apply loss reduction strategies that we provide to clients after the fact can only do so much to help an employer, or even a self insured.

The best way to keep your company’s workers comp premiums at an acceptable level is to make sure that the accident never happens to your employee. If you take $0 in the formula, then everything is $0 regardless of the rate bureau calculations.

Filed Under: rate bureau

California Rating Bureau WCIRB Equity Compensation

March 21, 2019 By JL Risk Management Consultants

Equity Compensation – California Rating Bureau WCIRB Provides New Rules

The California Rating Bureau WCIRB recently published an article which has been the basis for many debates among carriers, rating bureaus, and premium auditors.

Wikimedia Commons – Tonymas

When I attended the IAASE Conference last year in Columbia, SC, a part of the NCCI presentation was on this very subject.

Many large companies that had IPO’s in California decided to provide their employees with equity compensation. The big debate here involves where or not to include this in an employer’s payroll figures during the premium audit process.

Equity-based compensation – which can include stock options, restricted stock, restricted stock units, phantom stock plans and stock appreciation rights – will in some cases receive very large amounts of money in connection with these IPOs.

California’s rating bureaus WCIRB recently enacted new rules for these situation. Effective January 1, 2019, the USRP was amended to include rules that direct when equity-based compensation may be excluded from reported payroll.

Almost all of the WCIRB articles on how any type of remuneration (payroll) would be handled was to add the benefit to the payroll. The WCIRB decided to publish an article on a type of compensation that was considered a non-payroll item

I was going to write the next sections on equity compensation. I decided just to quote California Rating Bureau WCIRB’s take on the matter. This quote will lessen any confusion on the new rules.

Counted as Payroll (Remuneration)

Some equity-based compensation vests or is paid on a scheduled or annual basis, or based on the achievement of performance goals or milestone anniversaries. These payments can represent a recurring portion of an employee’s overall compensation and, similar to a bonus, are included as reportable remuneration. Employee payroll-based contributions to fund equity-based compensation plans are similar to employee payroll-based contributions to fund pensions or deferred compensation plans and also must be included as reportable remuneration.

Not Counted as Payroll

Payment of equity-based compensation due to accelerated cliff vesting triggered by an IPO of stock, or a change in majority ownership, is typically a nonrecurring, infrequent event that can produce very large increases in payroll that can result in volatility in reported payrolls from year to year without similar shifts in underlying loss exposure. These amounts are not a regular or recurring portion of an employee’s overall compensation and are therefore not a reasonable proxy for workers’ compensation exposure during an individual policy period. Equity-based compensation that is triggered by an IPO of stock, or a change in majority ownership, is not included as reportable remuneration.

Differences

The remuneration is counted if it is:

Scheduled
Recurring
Similar to a bonus
Pensions or Deferred Compensation Plan

The remuneration is not counted if it is:

Non-recurring
Very infrequent
Triggered by an IPO or
Change in majority ownership – (interesting one)

Sometimes IPO stock given to an employee can be a very large sum of money. Thanks to California’s Rating Bureau WCIRB for a clarification.

Filed Under: WCIRB

Pennsylvania Workers Comp Carriers May Owe Employers Premium Refunds

March 15, 2019 By JL Risk Management Consultants

Premium Refunds Likely Owed by Pennsylvania Workers Comp Carriers

Seventy Pennsylvania Workers Comp insurance carriers stepped up and fixed their Lost Cost filings. Please note you do not have to be a Pennsylvania employer to have been affected by the corrections. If your policy, premium audit or E-Mod Sheets have Pennsylvania listed, your company needs to read this article further.

Picture of Pennsylvania Workers Comp Capitol Rotunda

Wikimedia Commons License Bestbudbrian

I usually do not comment on the photos. The Pennsylvania Capitol Rotunda is stunning.

The insurance carriers (except one) are not to blame for the recent press releases and corrective filings. The Pennsylvania Compensation Rating Board (PCRB) issued incorrect advisory loss costs in their 2018 filings. We have chosen not to point out the name of the one misreporting carrier.

Who was at fault in this Pennsylvania Workers Comp conundrum remains water under the bridge. The error was eventually caught and fixed but only prospectively (going forward).

Last week, we published an article on the PCRB’s missing the highly inflated loss numbers from one carrier. One of the questions that begged to be asked was why the PCRB missed the inflated numbers.

PCRB FAQ Notables

The following Q&A’s and others can be found at this link.

Will there be any adjustments to premium already paid on policies effective between April 1, 2018 and December 31, 2018?

Premiums are established by insurance carriers, and they are based on a variety of considerations, only one of which is loss costs. Other considerations include (but are not limited to) carrier loss cost multipliers (LCMs), schedule rating adjustments, retrospective rating plans, and multiple line discounting. The PCRB is not an insurance company. The PCRB does not underwrite coverage, issue policies, make rates, or calculate premiums, either prospectively or retrospectively. Questions regarding policies written using rates that were based on the loss costs approved effective April 1, 2018 should be directed to the insurance carriers that issued the policies.

Will my Experience Modification change?

Experience modification factors for policies to be written or renewed as of January 1, 2019 were previously issued. These experience modification factors will be revised, assuming Insurance Department approval of the January 1, 2019 filings. Additionally, issuance of experience modification factors for February through March is on hold pending this approval.

______________________________________________________

Experience Modifications After A Correction

One of the areas that usually contain errors more than any after a wholesale correction is the Experience Mod calculation. The figure should be monitored very closely for any miscalculations. According to NCCI and other rating bureaus, an X-Mod takes 33 steps to promulgate a company’s E-Mod.

Employers Need To Take Action

We should all move on except for one point. Employers that paid Pennsylvania Workers Comp insurance premiums in 2018 should receive a refund check. I am not a fan of crediting future policies. Why – because when I have seen future policies credited, those policies are sometimes fraught with a number of errors.

The premium refunds are much easier to calculate when they are refunded for that certain year. Almost any premium auditor will attest to that fact.

Even though there should be more corrective rate filings in the future, the count stands at 70 Pennsylvania Workers Comp insurance carriers that have filed the proper corrective filings. As a service to our blog and newsletter readers and to Pennsylvania employers, the 70 are listed below.

Even if your carrier is not listed, you should contact them along with your agent. If you have any further questions, please use the Contact Us page here to send me an email.

There are more than the 70 below reporting carriers that provide Pennsylvania workers comp coverage in the Keystone State. By the way, when will those Pennsylvania workers comp carriers step up and file a correction? I will update this list as more carriers correct the filings or write another article. Kudos are sent to Zenith and ZNAT for fixing the problem first.

The corrected rate filing “fixes” are split between before and after April 1, 2018. Other carriers filed a combined rating. Look closely to see if your carrier is on the list.

Company Name	Date Submitted	Notes
Zenith Insurance Company	December 17, 2018	For policies issued between April 1, 2018 and April 30, 2018
Zenith Insurance Company	December 17, 2018	For policies issued between May 1, 2018 and December 31, 2018
ZNAT Insurance Company	December 17, 2018	For policies issued between April 1, 2018 and April 30, 2018
ZNAT Insurance Company	December 17, 2018	For policies issued between May 1, 2018 and December 31, 2018
The Continental Insurance Company	December 21, 2018	For policies issued between April 1, 2018 and December 31, 2018
American Casualty Company of Reading, PA	December 21, 2018	For policies issued between April 1, 2018 and December 31, 2018
National Fire Insurance Company of Hartford	December 21, 2018	For policies issued between April 1, 2018 and December 31, 2018
Transportation Insurance Company	December 21, 2018	For policies issued between April 1, 2018 and December 31, 2018
Valley Forge Insurance Company	December 21, 2018	For policies issued between April 1, 2018 and December 31, 2018
Continental Casualty Company	December 21, 2018	For policies issued between April 1, 2018 and December 31, 2018
EMC Property & Casualty Company	January 11, 2019	For policies issued between April 1, 2018 and December 31, 2018
EMASCO Insurance Company	January 11, 2019	For policies issued between April 1, 2018 and December 31, 2018
Employers Mutual Casualty Company	January 11, 2019	For policies issued between April 1, 2018 and December 31, 2018
Hamilton Mutual Insurance Company	January 11, 2019	For policies issued between April 1, 2018 and December 31, 2018
Union Insurance Company of Providence	January 11, 2019	For policies issued between April 1, 2018 and December 31, 2018
American Interstate Insurance Company	January 24, 2019	For policies issued between April 1, 2018 and December 31, 2018
State Workers’ Insurance Fund	January 30, 2019	For policies issued between April 1, 2018 and December 31, 2018
American Home Assurance Company	January 31, 2019	For policies issued between April 1, 2018 and December 31, 2018
AIU Insurance Company	January 31, 2019	For policies issued between April 1, 2018 and December 31, 2018
Commerce and Industry Insurance Company	January 31, 2019	For policies issued between April 1, 2018 and December 31, 2018
Granite State Insurance	January 31, 2019	For policies issued between April 1, 2018 and December 31, 2018
Illinois National Insurance Company	January 31, 2019	For policies issued between April 1, 2018 and December 31, 2018
National Union Fire Insurance Company of Pittsburgh, PA	January 31, 2019	For policies issued between April 1, 2018 and December 31, 2018
New Hampshire Insurance Company	January 31, 2019	For policies issued between April 1, 2018 and December 31, 2018
The Insurance Company of the State of Pennsylvania	January 31, 2019	For policies issued between April 1, 2018 and December 31, 2018
AIG Assurance Company	January 31, 2019	For policies issued between April 1, 2018 and December 31, 2018
AIG Property Casualty Company	January 31, 2019	For policies issued between April 1, 2018 and December 31, 2018
Motorists Mutual Insurance Company	January 30, 2019	For policies issued between April 1, 2018 and December 31, 2018
Allied Property and Casualty Insurance Company	February 6, 2019	For policies issued between April 1, 2018 and December 31, 2018
AMCO Insurance Company	February 6, 2019	For policies issued between April 1, 2018 and December 31, 2018
Depositors Insurance Company	February 6, 2019	For policies issued between April 1, 2018 and December 31, 2018
Nationwide Mutual Insurance Company	February 6, 2019	For policies issued between April 1, 2018 and December 31, 2018
Nationwide Property and Casualty Insurance Company	February 6, 2019	For policies issued between April 1, 2018 and December 31, 2018
Nationwide Mutual Fire Insurance Company	February 6, 2019	For policies issued between April 1, 2018 and December 31, 2018
Harleysville Insurance Company of New Jersey	February 6, 2019	For policies issued between April 1, 2018 and December 31, 2018
Harleysville Insurance Company	February 6, 2019	For policies issued between April 1, 2018 and December 31, 2018
Harleysville Preferred Insurance Company	February 6, 2019	For policies issued between April 1, 2018 and December 31, 2018
Harleysville Worcester Insurance Company	February 6, 2019	For policies issued between April 1, 2018 and December 31, 2018
Pharmacists Mutual Insurance Company	February 7, 2019	For policies issued between April 1, 2018 and December 31, 2018
Motorists Commercial Mutual Insurance Company	February 7, 2019	For policies issued between April 1, 2018 and December 31, 2018
Nationwide Agribusiness Insurance Company	February 8, 2019	For policies issued between April 1, 2018 and December 31, 2018
Farmland Mutual Insurance Company	February 8, 2019	For policies issued between April 1, 2018 and December 31, 2018
National Casualty Company	February 8, 2019	For policies issued between April 1, 2018 and December 31, 2018
BrickStreet Mutual Insurance Company	February 6, 2019	For policies issued between April 1, 2018 and December 31, 2018 with annual premiums less than $100,000
NorthStone Insurance Company	February 6, 2019	For policies issued between April 1, 2018 and December 31, 2018 with annual premiums less than $100,000
SummitPoint Insurance Company	February 6, 2019	For policies issued between April 1, 2018 and December 31, 2018 with annual premiums less than $100,000
PinnaclePoint Insurance Company	February 6, 2019	For policies issued between April 1, 2018 and December 31, 2018 with annual premiums less than $100,000
AlleghenyPoint Insurance Company	February 6, 2019	For policies issued between April 1, 2018 and December 31, 2018 with annual premiums less than $100,000
ACE American Insurance Company	February 8, 2019	For policies issued between April 1, 2018 and December 31, 2018
ACE Fire Underwriters Insurance Company	February 8, 2019	For policies issued between April 1, 2018 and December 31, 2018
ACE Property and Casualty Insurance Company	February 8, 2019	For policies issued between April 1, 2018 and December 31, 2018
Bankers Standard Insurance Company	February 8, 2019	For policies issued between April 1, 2018 and December 31, 2018
Indemnity Insurance Company of North America	February 8, 2019	For policies issued between April 1, 2018 and December 31, 2018
Insurance Company of North America	February 8, 2019	For policies issued between April 1, 2018 and December 31, 2018
Pacific Employers Insurance Company	February 8, 2019	For policies issued between April 1, 2018 and December 31, 2018
Westchester Fire Insurance Company	February 8, 2019	For policies issued between April 1, 2018 and December 31, 2018
NOVA Casualty Company	February 28, 2019	For policies issued between April 1, 2018 and December 31, 2018
Chubb Indemnity Insurance Company	February 13, 2019	For policies issued between April 1, 2018 and December 31, 2018
Chubb National Insurance Company	February 13, 2019	For policies issued between April 1, 2018 and December 31, 2018
Great Northern Insurance Company	February 13, 2019	For policies issued between April 1, 2018 and December 31, 2018
Pacific Indemnity Company	February 13, 2019	For policies issued between April 1, 2018 and December 31, 2018
Vigilant Insurance Company	February 13, 2019	For policies issued between April 1, 2018 and December 31, 2018
Federal Insurance Company	February 13, 2019	For policies issued between April 1, 2018 and December 31, 2018
The Hanover American Insurance Company	February 27, 2019	For policies issued between April 1, 2018 and December 31, 2018
Massachusetts Bay Insurance Company	February 27, 2019	For policies issued between April 1, 2018 and December 31, 2018
The Hanover Insurance Company	February 27, 2019	For policies issued between April 1, 2018 and December 31, 2018
Citizens Insurance Company of America	February 27, 2019	For policies issued between April 1, 2018 and December 31, 2018
Allmerica Financial Benefit Insurance Company	February 27, 2019	For policies issued between April 1, 2018 and December 31, 2018
Allmerica Financial Alliance Insurance Company	February 27, 2019	For policies issued between April 1, 2018 and December 31, 2018
Arch Insurance Company	March 4, 2019	For policies issued between April 1, 2018 and December 31, 2018
Arch Indemnity Insurance Company	March 4, 2019	For policies issued between April 1, 2018 and December 31, 2018
American Automobile Insurance Company	March 8, 2019	For policies issued between April 1, 2018 and December 31, 2018
Fireman’s Fund Insurance Company	March 8, 2019	For policies issued between April 1, 2018 and December 31, 2018
National Security Corporation	March 8, 2019	For policies issued between April 1, 2018 and December 31, 2018

Filed Under: Pennsylvania

US Treasury Sell Off By China and Japan – Effect on Work Comp Markets

March 14, 2019 By JL Risk Management Consultants

Insurance and Workers Comp Markets Anchor Investment Concern

How can Workers Comp markets sustain any effect from China selling off US Treasuries? Check my earlier articles on this very subject at this link.

Take a look at this chart from the Feds on to see if this situation is true.

Wikimedia Public License Cannedcat

I was going to include the chart, but the resolution would not be that great for viewing. If you want to skip this financial analysis and see the Workers Comp info, scroll down to the next heading.

One caveat to skipping this section is that all interest rates use these figures as part of the basis for mortgage, credit cards, and loan rates on personal loans.

While searching through economic-type articles, I came across one of those BUY GOLD articles and ads saying that China is selling off more US Securities than in a long time. China is replacing the Treasuries with gold. Please excuse the marketing page for gold, but the article has great analytics.

I then decided to look to see if the #2 holder of US Treasuries had sold them off over the last year, Yes, Japan, the #2 holder of US Treasuries had also sold them off in the last 12 months.

US Treasury Holdings China and Japan

The reason (actually opinions) why China and Japan are selling them off can be found at Bloomberg Asia in the late evening hours (East Coast Time). Actually, I watch it sometimes as the “outside looking in” viewpoints on US financial news can be eye-opening.

Here are the numbers:

China – $62 billion sell-off
Japan – $24 billion sell-off

Usually, the US Treasuries are replaced with US stocks, which means the money did not leave the country. When our two largest holders of treasuries are not shifting the money, but pulling it back into their own countries, that may be something to track at least every year.

You may look a the whole market and notice an increase in US Treasuries. That is exactly true, Then again, if you have ever sold anything and you tell your boss that sales are down with your top two customers, that would be a bad scene.

Insurance Carriers Investments – US Treasuries

If one looks at the SEC filings by insurance carriers, there will always be a section on investments. Carriers love to dabble in the stock markets. However, the safer investments – Bonds, Treasuries, Cash, etc. usually hold most of the investment risk. Insurance carriers are usually invested in conservative investments.

When the two main investor countries start to sell off their investments, the yield will usually decrease. The chart below shows the drop from a safe yield of 3.25% to 2.6%. This chart is up to the minute from one year ago.

Provided by Yahoo Finance

If insurance carriers cannot make a profit on investments, where would they go to make investment returns for their shareholders? How about a premium increase? I am not saying that would happen. Sometimes common sense rules, though.

Bottom Line on US Treasuries and China or Japan

The rates are not solely responsible for any type of premium increase on Workers Comp as we know from articles on this blog that many variables have an effect. Look at the US Treasury sell-off as a driver, not the sole variable.

Filed Under: China Tagged With: US Treasuries, Workers Comp Market

Workers Comp Payroll Figures Affect More Than Just The Premium Audit

March 7, 2019 By JL Risk Management Consultants

Workers Comp Payroll Records Hang Around For Four Years+

A company’s workers comp payroll records are vital to the premium audit process. Assessing a company’s payroll records is one of the auditor’s main job functions.

workers comp payroll stack of dollar bills

So your premium auditor has combed through your company books . The auditor has generated a premium audit which the billing department will bill your company very soon – within 30 days.

Wow!, the concern about your workers comp payroll records is over and now you can move on as that is the last you company has to worry about those records. They will affect your company no longer in the Workers Compensation insurance process.

Hold on! Not so fast – those payroll figures are with your company for four years or more. Ouch! But why, you ask.

My last article centered on a part of your Experience Mod sheets Do you have your E-Mod sheets out? Do you know where they are so that you can see my upcoming point?

Look at your Experience Mod Worksheets starting with page two. Look down the left column – do you see that NCCI stores your workers comp payroll information on each of your policies.? I would rather that you look at your own X-Mod worksheets. If you do not have it available – which is not a good development an example provided by NCCI is below. Ignore all the arrows except for #6.

NCCI(c)

Do you see the Payroll column? Hey, what is that doing here? Well, the workers comp payroll in every Classification Code(see the Code Column) establishes your company’s risk under workers compensation.

From my last article, the Expected Losses – with payroll as one of the equation variables – are compared to your actual losses.

If you look at your complete Mod sheet, the policies go back four years or more. I am just showing you one year of one policy as an example.

What do we know or do about the payroll figures? If they do not look right, compare them to an annual payroll statement for that policy year. Remember that payroll (remuneration) does not cover every item in your payroll summaries.

One of the secrets of Experience Rating is that higher payrolls usually will increase your indirect discount – the interesting Wt variable. Or better yet, accurate payrolls make the Wt variable accurate.

If you decide to shop your workers comp policy around in the market. What is one of the first things that a good agent, underwriter or consultant wants to see? I ask for the Experience Mod Sheets and Loss Runs as the first documents.

Analytics and Payrolls

Now with so much credence given to analytics – your payroll figures on the Mod sheets can easily go back 20 years. NCCI, WCIRB, and the independent rating bureaus store your Mod sheets for many years. Analysts/underwriters/carriers, etc. will look back beyond four years. One of the main areas examined is the workers comp payrolls.

Filed Under: payroll