Assigned Risk Pools Generated Large Number of Questions

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Questions About Assigned Risk Pools

Last week, I posted a short note about the Assigned Risk Pools for Workers Compensation in West Virginia.

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I received quite a few questions about the Assigned Risk Pool from West Virginia and other states. It seems that quite a few additional employers are being placed into the Pools that even have good E-Mods. I will try to answer some of the questions in this and the next few posts.

A good E-Mod is one that is less than or equal to 1.0. A good E-Mod can even go up to a 1.2 under certain circumstances.

The trucking industry had experienced that situation a few years ago. A trucking client of ours had an E-Mod of .89 and was placed into the Pool. This was due to the market tightening/hardening on risk. They are now out of the ARP even though their E-Mod had increased to a 1.19 due to a few severe accidents!

We were consulted by an asbestos removal company that tried to get out of the ARP. There was no market to place them in, even though they had not had an accident or occupational illness in the last 10 years.

The quickest way to get out of the Assigned Risk Pool is to heavily shop the insurance market for your Workers Compensation coverage. If you are in West Virginia, you are free to choose a carrier besides Brickstreet, but if you are assigned to the Risk Pool, you must take whatever carrier you are placed with by the Insurance Commissioner and NCCI.

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The best way to get out of and stay out of the Assigned Risk Pool is to increase the safety standards that you have in place for your company. If your E-Mod is above 1.1, you are headed to the Assigned Risk Pool. The key to a great E-Mod is not avoiding the one big accident–it is avoiding accident repetition. That is the way the Workers Compensation Experience Modification system has been built. Right or wrong, the system penalizes frequency much more than severity.

My next post will cover Five Keys to Reducing Your Workers Comp Claims, which in turn will quickly bring down your E-Mod.

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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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