Workers Comp Audit Stress Reducer
Use It For Your Next Premium Audit

Reserve Reviews – Hidden Way to Save Workers Comp Funds


Workers Comp Reserve Reviews Can Be Complicated

Reserve Reviews – the hidden way to save $ on your Workers Comp premiums – Reserve reviews are not something that most of our competition cares to address. However, reserve reviews are just as important as premium reviews. Once again, we try to use the word review and not an audit – see the previous blog.

Hand Putting Money In Piggy Bank Reserve Reviews Picture

Premiums reviews “look-back” three years into the past. Reserve reviews are the “here and now” part of your Workers Compensation premium. It is virtually impossible to go back in time and try to negotiate reserves. What you have on the file today is what counts.

Workers Comp file reserves are the engine of the E-Mod process. Reserves are not only what is spent out on a Workers Compensation file, but what the adjuster thinks will be spent out on the claim over its lifetime. Please remember, the funds that are paid on an open file to date have little to do with the reserves on the Work Comp file. You are charged THREE TIMES over three years for the reserve figure on the file. Not reviewing your reserves is like putting cash in the shredder.

Reserves run a totally different cycle from premium reviews and your E-Mod. For instance, to figure your E-Mod for 1/1/08, the reserves are used as they were on your Unit Stat date which should be 6/30/07. Here is a very important point. Whatever the reserves are on 6/30/07 at 5PM is usually what your E-Mod is figured from for your 1/1/08 policy date.

If you/we happen to find that a Workers’ Comp file is over-reserved on 7/11/07, that is just the way the ball bounces. What I am getting at is that you should start your reserve review program as soon as your new policy goes into effect.


For a 1/1/08 policy, the reserve review needs to start at least by 3/1/07. It takes a few weeks to begin studying, negotiating and tracking your reserves. Your reserves need to be tracked up to and including 6/30/07.

Picture of Premium Reserve Reviews Dollars

This is a different cycle than the Work Comp premium reviews – see previous note. The Bottom Line is that you must start very early to get your reserves in line. If you feel that you are in over your head, call a reserve review specialist such as our company. Do not just write checks.

Next Up – What is the secret question to ask anyone that deals with your Workers Comp to see if they understand the whole Work Comp picture?

Our main website is at www.cutcompcosts.com. If there are any terms that you need to look up, please click on the Definitions tab or use the Contact tab to email us for questions.

©J&L Risk Management Inc Copyright Notice



James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


Get the latest workers' comp news FREE!

This field is for validation purposes and should be left unchanged.