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North Dakota Fund Balance Causes Additional Auditor Review


North Dakota Fund Balance – Another Review of the Same Numbers?

The North Dakota Fund balance situation has now caused another review with a different auditor.

Graphic of north dakota Eagle In Blue Background Emblem

This time the auditor, from Maine, is supposed to come up with reasons why there is a surplus. There are two reasons for a surplus in a Workers Comp fund.

They are:

  1. Overcharging the fund members for their premiums
  2. Denying benefits to claimants


The first one is obvious. You get a surplus because you have had your fund members pay out more money in premiums than were paid out in benefits. How do you fix this problem? You may reduce premium increases or add to the premium decreases to your members. Another way to remedy the situation is to return the premiums to the members as dividends at least every three years.

Woman Holding File North Dakota Auditor

One area that usually causes premium overcharges is the over-reserving of the Workers Comp claims. If the file has a huge reserve and only a small portion of the reserves are paid out in benefits, then the fund takes in too much $.

The second one was supposed to be addressed in a round of audits by a provider earlier this year to see if too many claims were denied. Unfortunately, to date, no actual data was produced by the auditing company on how many files were legitimately denied.

I do hope that the current auditor hired by North Dakota realizes the two very obvious reasons for a fund to have an excess in reserves. We shall see.

On a side note, did anyone notice that another one of their prior auditors is now refusing to talk to them or turn over data?  Who is making the final decisions on what auditors to use? I will revisit the North Dakota fund balance situation when the auditor produces some results.

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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


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