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Consent to Consented – Definition – Premium Requires Insured Signature

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Consent to Consented Premiums

Consented premium allows the insurance carrier to deviate from their state filings for a certain Workers Comp Class Code. This is a popular way to write policies in the state of Florida. A carrier supplied factor is added to the filed rates. The “consent” is given by the signature of the insured.

Graphic of Piggy Bank Consent With Coin Dollars
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This usually happens when a company is very hard to classify or the classification code that is closest in nature to the company does not account for all of the risks inherent to the specific employer. These premiums must be pre-approved by the department of insurance where coverage is sought.

We had reviewed a recent policy where the agreed premium was 280% more than the filed classification code. The insured employer had signed off on the consented (agreed) premium.

The advantages to agreed premiums are:

  • Allows a hard-to-cover employer to have Workers Comp insurance coverage
  • Must be approved by the Department of Insurance

The disadvantages are:

  • A much higher Workers Comp premium cost.
  • If any questions come up later about the policy or audit, it is very difficult to dispute as the premiums and classification codes were consented to by the employer.
  • There may have been a classification code that more closely fit the employer which could have avoided a heavy surcharge.
  • The E-Mods are being calculated from a less-risky classification, even though there is a higher-risk element added to the policy.

Update – I received a notice from my home insurer that I needed to sign a consented premium form as what they are going to charge me was above the recommended amount by the North Carolina Insurance Commissioner.   If I did not sign it, I was going to be canceled in 30 days.  

Next Up – The West Virginia Workers Comp Forum of 4/08/08

 

 

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt 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

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