Workers Comp Audit Stress Reducer
Use It For Your Next Premium Audit

WCIRB Over-reserving Correction- California Update


WCIRB Over-reserving Correction – Rating Bureau Helps Out Employers – Wow!

The Webinar Info Is at the bottom of this article

California’s Workers’ Comp Insurance Rating Bureau provides a great assist to employers. The WCIRB over-reserving correction algorithm helps employers greatly.  Kudos to them – read on to see how they provide a safety net to employers.

If you are not that familiar with the WCIRB or rating bureaus, check out this article.  And if you happen after reading this article, to want to know more, yes, there is a webinar on the subject in May.  The webinar (freebies) info is provided later in this article.

WCIRB Over-reserving Correction – The Cool Rule

I had long forgotten about this rule that shows the WCIRB helps employers out in a roundabout and under-the-radar way that goes totally unnoticed.  Below is the rule that can be found here on their website.  By the way, I do not like referring to the WCIRB as “it or its.”  Rating bureaus are comprised of a group of people = their.


If the aggregate value of all closed claims that are required to be used in the experience rating are valued collectively at an amount that is less than 60 percent of the aggregate of the highest value at which each closed claim was previously used in a rating, then the experience rating may be revised using the most current reported values. Experience modifications will not be revised pursuant to the Closed Claim rule if it results in an increase to the experience modification.

When a claim is first reported by an insurer as closed on a unit statistical report, the WCIRB automatically reviews the policyholder’s current and two immediately preceding experience modifications to determine if they should be revised pursuant to the Closed Claim rule. As necessary, revised experience modification(s) are automatically published and the insurer is notified.


This rule sounds like actuaries created it – right?  I am joking.  The WCIRB’s personnel have been nothing short of excellent in customer service over the years in all my interactions with them.  Let us look at a few of the terms in the rule.

  • Aggregate value – a total of all closed claims
  • 60% is the most important number in the calculation
  • 40% is the other important number
  • Closed claims only for the current year
  • Cannot increase your Experience Mod (X-Mod) – only for reduction (reduced premiums)
  • The insurer is notified of the change and the employer after 60 days
  • Instances where over-reserving may not be the cause – subrogation recovery and rarer circumstances

WCIRB Webinar Next month on Closed Claim Rerates

Example – I have an example that would only cause confusion.  No example, so this is where the webinar in May comes into play – you can find out better examples there.  I will refer back to this article or update this article after the WCIRB webinar in May.

Graphic Emblem Mod Talk WCIRB over-reserving correction
(c) WCIRB of CA

You can register here – totally worth the time spent.  The webinar is on Thursday, May 20, 2021, from 10:00 AM – 10:30 AM Pacific Time.  I will let the WCIRB provide an example.

I covered the subject of how to tell if your workers’ compensation files have over-reserving in this article. 

The key is your company needs online access to your claims so that you can follow the reserving and print your own loss runs. 

WCIRB Webinar Update – Closed Claim Rerates

Five days ago, the WCIRB sponsored a webinar that covered closed claim rerates or the term that I used WCIRB over-reserving correction.

The webinar was a quick review of how closed claim rerates work and how they can benefit employers.  The main concept is that employers do not have to do anything to have the rerate calculated – the WCIRB does that automatically for employers.

I decided to include all the slides presented in case you may wish to go over them.  I usually do not include a bundle of slides and only use one as an example.

You can find the slides at this link. ModTalk-CCR-HO

These slides are not yet available on the WCIRB website.  The benefit to California employers is that all the work is done behind the scenes.  You do not have to do anything.

Let us review a few concepts covered at the webinar:

  • Automatically calculated
  • If the new Mod increases then the rerate is ignored by the WCIRB.
  • Only applies to the Mod for the current year – I asked a question to see if any past Mods could be recalculated – the answer by the presenters was only the current Mod, not the past ones.
  • A notification letter will be sent to the employer and carrier within two months of the rerate.
  • Open files are ignored in rerates

What To Do If You Receive a Rerate Letter

If your company receives a letter from the WCIRB advising of a rerate – you would need to contact the carrier if they have not already contacted you.

Let them know you have a rerate letter and ask for a refund – do this by letter.  The refund could be significant.

What does this do for employers?  The WCIRB over-reserving correction keeps the employer from paying premiums for over-reserved files.

The Key – perform loss run reviews often to make sure claims are closed quickly. – see this article for loss run reviews. 


©J&L Risk Management Inc Copyright Notice



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


Get the latest workers' comp news FREE!

This field is for validation purposes and should be left unchanged.