Reserve Review Schedule – Important Upcoming Date For January 1 Renewals
A reserve review schedule can save many headaches if your company has a January 1 renewal. January 1 remains the most popular date for renewals by far.
July 1st is the second most popular date. Most governmental entities renew on July 1st. Some governmental units have moved their renewals to January 1 over the past few years.
A few years ago, I published a set of articles centering on a reserve review timetable. I wrote a summary of the reserve timetable articles due to a few emailed requests.
The formulas are:
- Time to Begin Reserve Review = Unit Stat Date – 90 days (at a minimum) or policy renewal date + 90 days
- Unit Stat Date = 180 days (6 months) after policy renewal
The rating bureaus (NCCI, WCIRB, etc.) allow the extra six months for full claim reserve development. Remember that Total Incurred = Paid + Reserves. The total incurred figures will be reported to the rating bureaus.
Your target date to start a reserve review is usually three months after renewal. For January 1st renewals you are running 45+ days behind schedule. The upcoming Unit Statistical Date (Unit Stat Date) remains ever important. Your reserves for claims from the last three to four years peg to your Experience Mod on that date.
Claims departments usually review your reserves for reduction at closing. One phone call or email will not suffice for a good reserve review. Obtaining a full loss run just after renewal and starting then will give you a full six months to track, review, and if needed, negotiate reserves.
The recommended best method involves a year-round loss run reserve review and communication with the claims adjusters (by email) on a regular basis. Employers that begin a year-round review program are surprised when their reserves and eventually the E-Mod drops to an acceptable level.
There are many articles on how to do a loss run and reserve review in the articles I have written. For more info, you can click the Categories or Tags at the bottom of this article. Also, use the search box at the top right to find more articles on starting a reserve review schedule.
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