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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 1 renewal policies as a reference point.

Vector Graphic of Workers Comp File Reserves Working on Office

If you have a renewal date other than January 1, then please consult this article on the formula for calculating the due dates for your E-Mod reduction plan.

If I am correct, I left off with you having received your paper loss run or having online access. If you have online access, you have saved yourself at least 20 hours of work.

Now that is April 1, you have 90 days to analyze your loss runs, communicate your concerns, and possibly reducing your reserves. Doing this step incorrectly can have disastrous results on your E-Mod or Ex-Mod. Which files are you going to now contact your claims department on this week?

Graphic Of Workers Comp File Reserves Document Standing In A Row

Some of our clients seems to think that the files that are the oldest or have the highest reserves are the ones to question. That is not necessarily correct. I have written many blog posts on Total Incurred. This is one time that the Total Incurred figure (Paid + Outstanding Reserves) is not as important as the Outstanding Reserves.

The Outstanding Reserves (Total Incurred – Paid) is basically what the Workers Compensation adjuster thinks will be paid out in the future of the claim. If it is a new claim with a serious injury, the Outstanding Reserve figure will be extremely high. Do not waste your time or the adjuster’s if this is the case. Monitor the claim and reserves for future reductions.

If your insurance carrier whether by paper report or online access (and you can run your own reports) can only send you the OPEN files, that will save some time. Negotiating a closed claim is very fruitless unless there were duplicate payments or there was subrogation on the file. That is water under the bridge.

One very obvious question is how much Outstanding Reserves are there on a certain claim or all of your claims? If the figure is low, then it may be best to leave it alone. Usually, approximately one third of the Total Incurred value should be Outstanding Reserves. That is a very, very rough approximation.

I will cover more on this the next time. I try to keep the posts from dragging on too much.

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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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