March 2011

Workers Comp File Reserves – You ARE Running Late

Workers Comp File Reserves Important To Catch Up The Workers Comp file reserves important this time of year.  I have posted over the last two weeks on the process of performing a Workers Compensation file reserve review as a way of reducing your E-Mods or X-Mods. I am using January

Federalization Of Workers Compensation – Another Opinion

Federalization Of Workers Compensation From Peter Rousmaniere One of the more astute Workers Comp authors/bloggers recently wrote an article on The Federalization of Workers Compensation. I have been writing on this subject for over a year and it is good to see other opinions on what I think will be

E-Mod X-Mod Ex-Mod Question From One Of Our Readers

Reader Question On E-Mod X-Mod Ex-Mod California  Yesterday I received a question on Workers Comp E-Mod X-Mod Ex-Mod in California. Recently, our California Ex Mod greatly increased due to a few open claims that are dragging on and on. My policy doesn’t expire until mid-year and I am being charged

What Does Strategic Risk Management Cost?

Term Of The Day – Strategic Risk Management Strategic Risk Management (SRM) is the identification, assessment, and management of risk in an organization’s business strategy. When risks are realized under this process, action is taken swiftly. SRM involves predicting how possible events will affect the strategy and it’s execution, and what

How Do Excess Losses Affect My Premiums – Reader Question

Term Of The Day – Excess Losses In the Experience Modification Factor formula, Excess Losses are the amount of any single claim that is more than the cut-off point for inclusion as a primary loss. The NCCI experience rating formula uses the threshold of $15,000. The threshold varies in the formulas

Is Workers Comp Claims Made And Reported Policy?

Term Of The Day – Claims Made And Reported Policy A Claims Made and Reported policy has many similarities to a Workers Comp policy.   I often speak about reporting Workers Comp claims ASAP. While Workers Comp policies are not this type of policy. Many aspects are similar.   Claims

Workers Comp Reserve Reduction Review Plan For Dates Other Than January 1st

Reserve Reduction Plan For E-Mods Workers Comp reserve reduction review plans need to be on schedule.   I have devised a formula for calculating when your reserve or E-Mod reduction plan should begin overall. As I posted last week, you should start three months BEFORE your Unit Stat date. Sound

Workers Comp Reserve Reduction Plan – Is Yours In Place?

Reserve Reduction Plan And The Unistat Date I wrote last week on the timing and deadline for having your Workers Compensation reserve reduction plan in place. If your company has not begun with the plan, you are throwing away Workers Compensation Dollars. If your renewal date is January 1, you

Workers Compensation Captives – Are They Worth Exploring?

Workers Compensation Captives – A Legitimate Yet Complex Alternative Workers Compensation Captives have come to the forefront as a possibly viable alternative for Workers Compensation coverage.  Last week, I decided to explore Captives further by attending the CICA conference in Tucson, AZ.x After attending many of the sessions, I came

Expected Losses – Where Are They Located On My EMod Sheets?

Expected Losses – What Are They and Where To Find Them? The Expected Losses for an employer is the amount of loss an average firm reporting the same exposures in the same classifications would have had during the Experience Period (usually three policy years). Each rating year the NCCI or

What Is A Functional Capacity Evaluation (FCE)?

Functional Capacity Evaluation – Series Of Physical Tests  FCE or Functional Capacity Evaluation in Workers Comp is a series of tests administered to a claimant by a physical therapist or other health care professional. FCEs can be beneficial in determining an injured worker’s restrictions and capabilities. FCE evaluators can review

Advisory Loss Costs Do Not Appear On Your Workers Comp Policy

Advisory Loss Costs Are Published By Rating Bureaus  Workers Compensation Advisory Loss Costs (ALC) are published at state-specific times during the year. ALC’s are not to be confused with the insurance companies’ premium rates per classification code.  Most insureds will never see these rates as the insurance carriers file deviations

Pure Risk Keeps Insurance From Being Seen As Gambling

Pure Risk Is Not Gambling  Pure risk keeps the insurance industry from being considered gambling. With a pure risk you have three situations:   Chance of loss Chance of no loss No chance of gain With Workers Compensation, an employee may be injured while on the job or may never

Premium Audit Bill – D-Day Is Date You Receive It

D-Day – Premium Audit Bill Deadlines  Why would I post that this is premium audit D-Day? A majority of our clients renewed on 1/1/11. January 1 is still the date that a majority of companies renew their Workers Comp policies.  The premium audit cycle is that an insurance company premium

CICA Captive Conference 2011 Interesting Alternative Insurance

CICA 2011 Conference – Tucson AZ was a learning experience I attended the CICA Conference this week in Tucson AZ. The conference provided a large amount of information that I will have to sift through and post some of the important info on this blog next week. One thing I

Workers Comp File Reserves – You May Be Running Late

Workers Comp File Reserves Timing Important I try to post information on Workers Comp file reserves this time of year. Why? The majority of Worker Compensation policies renew on January 1st.  The Unit Stat date for those policies is 7/01/11. Your companies Unit Stat date will occur 6 months AFTER

Actuarial Report Contains Very Important Workers Comp Info

Actuarial Report Important For Budgeting  The actuarial report consists of a document or other presentation, prepared as a formal means of conveying the actuary’s professional conclusions and recommendations, of recording and communicating the methods and procedures, of assuring that the parties addressed are aware of the significance of the actuary’s

Pure Captive

Term Of The Day – Pure Captive A pure captive is the most basic of all captive arrangements. In the case of a “pure” or “single parent” captive insurer, the financial stability of the third party is completely dependent on the financial health of the parent. Commonly, the assets of such

Is Carpal Tunnel Syndrome Permanent Disability?

Carpal Tunnel Syndrome – Painful Condition The condition Carpal Tunnel Syndrome is pressure on the median nerve — the nerve in the wrist that supplies feeling and movement to the “thumb side” of the hand (the palm, thumb, index finger, middle finger, and thumb side of the ring finger). It

Partial Retention And Workers Comp Deductible Comparison

Partial Retention And Deductible Comparison Partial retention is a very common risk management strategy. In Workers Compensation, partial retention is usually attained by using one of the following strategies: Self insurance with reinsurance in case of catastrophic claims or a bad claims year Small deductible program Large deductible program I

Who Is CICA?

Term Of The Day – CICA CICA or Captive Insurance Companies Association is an association of risk managers formed to educate, inform, support and provide valuable networking opportunities to members and interested parties about captives, regardless of domicile or structure. CICA has no jurisdictional or commercial ties. Members come from a

Other States Coverage In All Workers Comp Policies – Probably Not

Term Of The Day – Other States Coverage Workers Compensation insurance can be very tricky when it comes to other or all states coverage.  Many employers such as trucking/transportation companies are in dire need of having other states coverage for their drivers. Workers Comp used to be written on an all

Insurance Buyers Swindled In Multinational Scam

Insurance Buyers Beware – All May Not Be As It Seems A large number of  Insurance buyers were recently swindled in scam. While reading a recent issue of Business Insurance, I couldn’t help but read the article on the front page with the headline “Insurance buyers swindled in scam, prosecutors

Bill Review and Disability Claim Management Very Expensive

Bill Review and Disability Claims Are Very Expensive  Bill Review  and disability claims have come to the forefront as two of the most outrageously expensive costs of Workers Compensation. A huge concern, especially in this economic climate, is that companies cannot survive with exorbitant Workers Compensation claims and disability claims

What Is A Cell Captive?

Term Of The Day – Cell Captive A cell captive is either a rent-a-captive or a sponsored cell captive. The main goal is to lower risk by separating the underwriting data and results into distinct entities. This allows for each cell to only be responsible for its cell and not for

Aggregate Stop Loss Reinsurance

Term Of The Day – Aggregate Stop Loss Reinsurance The aggregate stop loss reinsurance is a  type of reinsurance is becoming very rare and expensive. A form of excess of loss reinsurance which indemnifies the reinsured against the amount by which the re-insureds  losses incurred during a specific period exceed either

Insurer Sponsored Agency Captive

Term Of The Day – Insurer Sponsored Agency Captive These types of captives are sponsored by very large insurance carriers. They are almost a hybrid type of captive as the operation is borrowed from an agency captive and a cell captive. On the surface, they seem like any other captive.

Residual Market (RML) Insures A Large Proportion Of Employers

 Term Of The Day – Residual Market (RML) One of the reasons that alternative Workers Comp insurance is becoming so popular over the last few decades. Some states have enormous residual market losses that must be passed along to policyholders of regular voluntary market insurance. The RML now insures approximately

Onshore Captive

Term Of The Day – Onshore Captive The onshore captive are a viable alternative to offshore captives such as Bermuda. The oldest and largest onshore domicile is Vermont. The states that are now domiciles for onshore captives are: Alabama Arizona Arkansas Colorado Delaware District of Columbia Florida Georgia Hawaii Illinois

Workers Comp Claims Adjusting Services – Getting The Best Deal

WC Claims Adjusting Services The Claims adjusting services can be found with an RFP  for Workers Comp services. This is one of the “touchiest” subjects in Workers Comp right now with employers and governmental agencies. Risk Managers, company owners, CFO’s, and anyone in charge of their company’s Workers Compensation program are

Certificate of Compliance

Term Of The Day – Certificate of Compliance The certificate of compliance is important doc.A certificate which authorizes that a company is in compliance with municipal, state, or industry specifications, is a very important document for many business models. A compliance certificate can come in many forms; as a city

Vermont Workers Comp – Coming To An End?

Vermont Workers Comp Ending? Will Vermont Workers Comp fade away? Vermont recently appeared on the radar for Workers Comp. The state had been relatively quiet for many years. If there was a state that could possibly make 24 hour coverage work, Vermont would be one of my top picks. Having

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