Worker’s Comp Insurance Companies Did This One Thing Right
The Pennsylvania Workers Comp Rating Bureau recently lambasted two Worker’s Comp insurance companies for misreporting and delayed reporting of policy information. One of them has verbally threatened me with multiple lawsuits to no avail. I will not mention names here.

I pondered for some time over – wait – what is one thing that insurance companies have gotten right over the years? I am sure there are other areas. I am thinking of my own actuarial, claims, expert witness, and financial advisory background in worker’s compensation.
And the answer is….the separation of powers – indirectly.
Insurance carriers remain very strict in the timing and setting of reserves – but not necessarily the amount of reserves.
In all my years as an adjuster, supervisor, manager, and VP, I was never once approached to artificially increase or decrease reserves due to the effect it would have on how an insurance carrier would charge an insured in the future.
No carrier has ever advised me to increase reserves to affect any premiums due to the insurance rating cycle (UNITSTAT Date).
No TPA has ever asked me to manipulate reserves to make a self insured client look better or worse in their budgets or SEC filings.
I have not seen any of the same types of purposeful data manipulations in any reviews that I have ever done over the years. I am not saying that this situation does not exist or occur in claims and underwriting departments. I have not seen it in any documentation that I have reviewed over the years.
Workers Comp Insurance carrier underwriting, claims, data reporting, marketing, and other departments have not worked together other than an agent questioning reserves, which, to me is fair play, and occurs often in claims departments. As an adjuster, I would dread the conference call with the agent and insured. Most of them turned out well.
One has to remember as Mark Walls (Safety National) and I have said – setting reserves is an art not a science.
The separation between claims and other departments seems to be fair. I doubt the line is crossed that often, which would probably end up with disastrous consequences.
I know of one company that artificially increased the reserves across the board. That worker’s comp insurance company has been in receivership for years.
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