Workers Comp Reserve Reviews Start With Current Loss Run
The start to effective Workers Comp reserve reviews begins with a current loss run – hopefully online. This is the area that seems to be the most misunderstood.
We often have employers contact us about a loss run they had just received or about how their E-Mod increased so rapidly in one year. The fastest and most effective method starts with a loss run review.
We often recommend that the employer obtain a copy of their loss run. Your insurance carriers will provide a copy on request. The Work Comp carriers will usually provide a loss run quarterly.
Please remember that only the OPEN claims can be dealt with, as a closed claim or the previous reserves on a closed claim usually cannot be questioned later on. That is why it is so critical to track the claims as they develop. Discussing a reserve that was opened on a claim three years ago will not do any good. In other words, when a loss run is received, it should be reviewed on receipt.
J&L currently has many clients that ask us to review their claim reserve levels including risk managers and agencies. Some of the info we look for is listed below.
Things to look for in a Workers Comp loss run are:
- Old claims are still open
- Resolved claims are still open
- A small amount of indemnity total incurred with a large amount of medical total incurred, or vice-versa.
- A large increase in reserves or total incurred on a claim
- A re-opening of a closed claim
- The total incurred does not match the claim, such as a large amount of reserves on a minor injury
- The injury listed does not match the employee’s injury
- An injured employee’s name that you do not recognize
- Anything that just looks out of place.
- Many others
A reason or reasons may exist for the above bullet points. Remember the equation Total Incurred = Paid + Reserves in your Workers Compensation reserve reviews.
UP NEXT– Contact your adjuster if you find something questionable.
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