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Workers Comp Insurance Companies Excelled In This Area

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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.

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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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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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