Late Reported Claims Info by Carrier Can Cause E-Mod Increase
We received this emailed in question over the weekend. The business owner was not very happy about receiving a policy amendment and bill during the policy.
My agent just informed us that we are receiving an increased bill due to a policy adjustment as one of the carriers on our state rating bureau (NCCI in this case) was very late in reporting our claims information to the rating bureau. Is this allowed? Do we owe it?
The answer without going into policy specifics was actually yes. The actual date the Mod E-Mod or X-mod) was promulgated six months before the policy ended will apply to the next policy period. This is called the Unit Stat date.
However, the insurance carriers and state Workers Comp departments are allowed quite a bit of slack on these dates. The insurance carrier can report the claims information up to nine months late or three months into your next policy with usually no retribution of any kind.
I always think that the insurance carrier should be fined for running so late. There are some instances such as carrier insolvency; employer not allowing audit, and others where the carrier is not actually 100% at fault.
Some carriers are habitually late. We have a large multi-state client that has experienced 44 rating changes due to carrier late reporting and certain states’ Workers Compensation departments both filing late with the rating bureaus.
If, which is not the case in this instance, your Mod was adjusted after three months into the policy would be a cause for further investigation. There is a slightly complicated formula on late reported Mods that needs to be used in these instances.
Also, if your company receives a Mod reduction, there will be a credit to the policy that will very likely be settled up at premium audit time.
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