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April 2011

What Is A Short Rate Penalty For Workers Comp Policies?

The Short Rate Penalty Can Be Significant A short rate penalty is applied by insurers when a Workers’ Compensation insurance policy is cancelled by the insured before the expiration date of the policy. In the early days of the policy this penalty is steep. It will gradually taper off the

Carve Out Programs Look To Reduce Disputes and Costs

Term Of The Day – Carve Out Workers Comp Carve Out tis a hybrid benefit package that applies to just the Workers Comp Policy. An option allowed in some states, including California, where an employer and the union for the employer’s workers agree to collectively bargain a separate schedule of

Workers Comp Medical Only Claims – Your Money Down Toilet

Workers Comp Medical Only Claims And Claims Festering(c) Certain Workers Comp Medical Only Claims snowball into uncontrolled Lost Time Claims for employers and carriers.  My last post on Medical Only claims pointed out the pitfalls and concerns of medical only claims. I promised that I would get back to how

Mid-policy Assessments Endorsements – Becoming Larger Trend?

Mid-policy Assessments and Endorsements We have received a larger than normal number of calls and emails on mid-policy assessments and/or endorsements. A mid-policy assessment or endorsement should be examined very carefully. A past post on Red Flags that you may have been overcharged lists this as an area of concern.

Assigned Risk Adjustment Program (ARAP) – Does It Hurt Our Company?

Assigned Risk Adjustment Program – Term Of The Day The assigned risk adjustment program is an additional debit charge placed on Assigned Risk policies with experience modification factors higher than 1.00..   It is applicable to the NCCI jurisdiction states.  The notable exception is Massachusetts, where ARAP stands for All

Declaration Of Readiness To Proceed

Declaration Of Readiness To Proceed -California Work Comp Form The Declaration Of Readiness to Proceed resolves disputes in California.  Another of the forms required in California. It is a form used to request a hearing before a workers’ compensation judge when an injured employee is ready to resolve a dispute.

Application For Adjudication Of Claim

Term Of The Day – Application For Adjudication Of Claim  The Application for Adjudication Of Claim is the primary Workers Comp appeal form in California.  This term of the day is one from the WCAB in California. It is a form an injured employee files to open a case at the

How Do I Obtain Associate in Reinsurance (ARe)?

Term Of The Day – Associate in Reinsurance (ARe) The Associate in Reinsurance designation generates little discussion in the Workers Comp world.  Without reinsurance some self insured employers would find themselves in deep trouble.   One of the most misunderstood areas of insurance is reinsurance. More than one Workers Compensation insurance

What Is The Residual Market For Workers Comp?

Residual Market – Critical Under The Radar Coverage In insurance industry they need residual market for Workers Comp.Companies or industries that are considered high risk (for instance with an E-Mod of 1.7 and above) may not be able to obtain Workers Compensation insurance through the regular voluntary markets. The chart

When Is A Claim Compensable – Each State Has Its Own Inputs

Compensable Claims Are State Specific  An injury that meets the statutory qualification standard in a Workers Comp policy. It is the term used when an injured employee is qualified to receive workers compensation benefits. The term compensable also applies to work related illnesses. Each state generates its own level of

What Is Assumption Of Risk Doctrine?

Term Of The Day – Assumption Of Risk The Assumption of Risk term creates a lessening of liability in certain situations..  Workers Compensation usually does not allow any defendants to use this type of defense due to the “no-fault ” provisions built into the Workers Compensation system Some states do

Plain Language Laws In Workers Comp and Other Policies

Plain Language Laws Is a Misnomer Term The Plain language laws have failed at making insurance policies readable.Many insureds, including Workers Comp, complain vehemently that insurance policies are almost impossible to read. Some states have laws that require insurance policies to be written in layperson’s terms. As most, if not

Will the Illinois House Scrap Workers Comp?

Illinois House Debates Scrapping Workers Comp Program – What? If the Illinois House scraps the state’s Workers Compensation System, what will happen to the businesses and their employees? The system has been much criticized, but should these businesses and employees have to battle in court for payment for workplace injuries?

What Does Designation APA (Associate In Premium Auditing) Mean?

Term Of The Day – Associate In Premium Auditing APA or Associate in Premium Auditing is a professional designation awarded by the Insurance Institute of America (IIA). The goal is to Increase the premium auditor’s knowledge of auditing procedures. From the IIA Brochure – You will increase your overall insurance knowledge

Is Vocational Rehabilitation Good For Claim?

Term Of The Day – Vocational Rehabilitation Vocational rehabilitation can include a plethora of services that are offered to injured employees to help them return to work following a work injury. VR may involve transferable skills assessments, educational courses, job search assistance, and many other vocational aids. Vocational rehabilitation is sometimes

West Virginia Risk Pool Is Expanding To Include Workers Comp

Greenbrier County Joins West Virginia Risk Pool  Originally, the West Virginia Risk Pool was created to provide property and liability coverage to its counties all around the state. Recently, though, there is a movement to include Workers Compensation coverage. Formed 3 years ago by just 19 counties, the West Virginia

Medical Only Claims – Worst Type May Go Unnoticed Festering

The Very Worst Workers Comp Medical Only Claims Recently, I posted on the pitfalls of Workers Comp medical only claims. That article is here. The worst medical only claims nightmare results from claims festering – or an unknown claim that sits with undiscovered liability. There is a very small window

Federalization – Is Workers Comp Next Line of Insurance?

Is Workers Comp Next For Federalization? The Federalization of malpractice  makes one think that Workers Comp is the next step.  Federal medical malpractice reform hit the insurance airwaves very heavily last week. The bill is named HR5 – “Help Efficient, Accessible, Low-Cost, Timely Healthcare (HEALTH) Act of 2011.” The bill sharply

How Long Is Extended Reporting Period?

Term Of The Day – Extended Reporting Period The Extended Reporting Period never renews its provisions.   This is from one of our claims made policies that we have or previously had in place. This is not necessarily exactly Workers Compensation related. However, i have been involved very often consulting on

How Much Is Ultimate Loss For Claim?

Term Of The Day – Ultimate Loss The ultimate loss contains two basic definitions. In reinsurance, the unit of loss to which the reinsurance applies, as determined by the reinsurance agreement. In other words, the gross loss. In liability insurance, the amount actually paid or payable for the settlement of a

Aggregate Excess Insurance

Term Of The Day – Aggregate Excess Insurance This type of insurance is critical for Workers Comp self insureds. Even if a self insured has no large claims, a substantial number of claims can be devastating to their insurance budget. Aggregate Excess Insurance places a limit on the amount an employer

Is Cumulative Trauma An Injury in Workers Compensation?

Term Of The Day – Cumulative Trauma An injury diagnosed by a physician as occurring without bodily injury being the direct cause of loss. Cumulative Trauma includes injury caused by continual stress and strain. Such injury may be casually related to a person’s job and may be due to repetitive traumatic

What Is Utilization Management Process?

Term Of The Day – Utilization Management The Utilization Management on a workers comp claim tends to save funds.  However, as in California, the cost may be higher than the benefit even though it is a proven strategy for containing health care costs in Workers Compensation. The goal is to reduce

Medical Only Claims Festering – Fuse May Be Lit For Huge Loss

Medical Only Claims Festering (c) The term medical only claims festering was coined by me in the late 1980’s. Most medical only claims are just that – claims with low dollar values that close within 90 days. They usually do not affect your E-Mod (Ex-Mod) in most situations. There is

Workers’ Comp To Hit Big Time-On Small Screen

Workers’ Comp Debuts On Small Screen  The small screen will host a Workers’ Comp series.  I have often thought that, at times, Workers Comp is interesting and challenging. I even dreamed it to be comedic enough to support a TV show. Well, here it is. Eagerly anticipated and much talked

E-Mod (Ex-Mod) Review – Leave This Part Alone For Best Results

E-Mod (Ex-Mod) Review Of Outstanding Reserves  An E-Mod (Ex-Mod) review is something to leave to the experts.   Usually, approximately one third of the Total Incurred value should be Outstanding Reserves. That is a very, very rough approximation. I received a few question on this figure.This is an overall estimation

What Is A Planned Retention?

Term Of The Day – Planned Retention This is a risk financing term that refers to retention of losses by an organization or business as a result of a conscious decision. The organization makes a decision to assume the exposure while fully aware of the loss and exposure. Planned retention

Is A Payout Profile Important?

Payout Profile  – Term Of The Day The payout profile or LDF are important to a company’s  return on investment. This is becoming very important to recently founded Captives. The first few years that a Captive is in existence are the make or break years. LDF’s (Loss Development Factors) go

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