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Work Comp Adjusters – Settlement And Reserve Authority From Insureds

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Work Comp Adjusters – A Controversial Subject

Most Work Comp adjusters have a very strict authority level in the internal working of a claims department.   The subject of having to receive authority from the employer/insureds can often be an exercise in frustration.

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The previous blog article that I had written on this subject generated many questions by work comp claim adjusters and employers.

The claims adjuster trainees, claim adjuster, senior claims adjuster, supervisor, manager and Vice President all have an increased authority level for settlements and/or reserves.   The adjuster may have to hold six or seven meetings  just to have the reserves or settlements approved internally. 

Certain employers may request a type of special claims handling on a file.  This results in the adjuster after having several meetings internally to hold a meeting with a person or persons that may not completely understand the Workers Comp process.

Technology has eliminated many of the adjusters’ concerns that they may not know the level of when an employer is to be contacted before a settlement offer is made or large reserves are pending.  The claims department’s computer system may not allow the settlement offer or large reserves without having internal approval.

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More than a few work comp adjusters are concerned they may increase the reserve levels or initiate a settlement offer without an employer’s approval.   The adjuster very rarely handles files for one or two employers.   Some systems will advise the adjuster to contact the employer  when a reserve or settlement offer (for instance) is over $100,000.

I have actually seen an employer contact request when any reserve, compensation payment, or medical bill was more than $5,000.   The adjuster(s) spent more time asking for employer authority which made the file handling for that employer suffer over time.

There is a delicate balancing act on requesting that an adjuster make contact with a settlement or reserve authority request and not interfering with the 13 daily responsibilities of work comp adjusters.

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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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