Recent Nebraska Supreme Court Cases Underwriter Adjuster Changes

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Nebraska Supreme Court Cases

Two days ago, I analyzed a recent court case where the Nebraska Supreme Court Cases made a ruling that can devastate a state’s Workers Comp system.

Graphic Of Nebraska Supreme Court Logo
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The conundrum is two-fold for carriers and self-insureds and their Third Party Administrators (TPA’s):

  1. How do the insurance carriers make up the difference now that a law that will likely be exploited is now “on the books?”
  2. Can insurance carriers properly adjust files now that there is a cloud of a bad decision on the definition of an accident?

The carriers’ underwriting departments could have in no way anticipated such a momentous decision that may open up the floodgates on past, present, and future denials of claims that were based on the definition of an accident.

If you did not read the article from two days ago in this blog, it may behoove you to look at the article here.  The article has links to the decision.  Follow this link for the prior bad decision by the Nebraska Supreme Court.

Incurred But Not Reported (IBNR) can only offset so much of a new bucket of claims that may have to be paid or settled due to such a decision.  Changing the definition of an accident can alter the underpinnings of how claims are viewed in a state.

Man And Woman Arguing Nebraska Supreme Court Cases In Front Of Judge
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Twenty years ago, the large carriers were going to pull out of writing in North Carolina due to an even worse Supreme Court decision.  The NC legislature stepped in to quell employers’ and carriers’ concern with legislation that corrected the decision.

Claims adjusters in Nebraska may now have to consider or reconsider claims where the definition of an accident was expanded from a single traumatic incident into an incident that stretched for months or years.

Employers may notice that claims where the definition of an accident comes into play, especially on denials, large increases in Total Incurred which increases an employer’s E-Mod (X-Mod) or LDF if self insured.   Adjusters usually react to bad case law on the books by heavily increasing the reserves on a portion of their files that involve an accident definition.

I may sometimes not agree with carriers or TPA’s.  However, in this case, when the road-map of underwriting and claims handling change overnight, what is a carrier’s underwriting and claims department going to do in such cases?

The bottom line is the employers in Nebraska could end up paying more premiums and the self insureds could end up with a much large WC budget when the unanticipated is now a fact.  Even worse, the employers may soon find fewer carriers writing WC in Nebraska.

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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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