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$250,000 Claim Reserve Level – Why Is that Number So Important?


$250,000 Claim Reserve Level Creates Many Critical Responsibilities

The $250,000 claim reserve level causes many necessary actions.  Some of them are obvious.   The other not-so-obvious actions are just as important.

Picture of Turkish Money $250,000 claim reserve level
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Please note that the Reinsurer and Excess Insurer are the same for this article.

Usually,  a claim that reaches this level involves Vice President or Examiner approval to input the reserve into the system.  The checklist action plan can be enormous at this level to the claims adjuster.

Some of those tasks are:

Reinsurance reporting – This area can slip by if one is not careful.   The $250,000 claim reserve level will likely cause some type of  flag to the reinsurer.    It never looks good if the reinsurer has to ask the claims staff for the report.   The reinsurer should have some prescribed report they wish to receive at the $250,000 and higher claim reserve levels.    Each reinsurer may require a totally different type of report.

Employer reporting Completion of this task needs to occur before they reserves are entered into the system.   Apprising an employer  of this reserve level will save many headaches in the future.  Many times we receive loss runs where a large reserve exists on the file with no explanation.

Money $250,000 claim reserve level in money clip
by StockUnlimited

Assigning to Field Case Manager or Rehabilitation Nurse –   When a file hits the reserve level, better late than never to assign out a rehabilitation nurse Is there any reason to not assign it out to one?  Medical control is mission critical along with a strong return to work plan.  The rehab nurses are one of my favorite risk management techniques.

Subrogation Liens Must Be Covered – An interesting fact from a report by Mark Walls of Safety National is 24% of all huge claims in their inventory result from automobile accidents.  Obtaining a police report is an easy task.  Do not be the adjuster that forgets to cover their subrogation.  We see no effort to pursue subrogation in files quite often.   Writing  a subrogation lien letter takes such a short amount of time.

Employer Involvement – Claims that reach this level must be followed closely by the employer.  Did you send the employee to your carrier or TPA’s recommended industrial-minded physician?  Do you have a modified duty job available?  Are you in contact with the injured employee and keeping up with their medical treatment?  What restrictions does the injured employee have at this point?  An active employer usually reduces the cost of the claim while providing their injured employee with the best care.

These are a few things to cover when a claim is initially set or increases to a $250,000 claims reserve level.


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One Response

  1. Pretty! This was a really wonderful post. Thanks for supplying these details. We love the articles on reserving.


James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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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