Answers to the Workers Comp Advanced Quiz + Bonus

Answers to the Workers Comp Advanced Quiz – Did You Answer All 12 Correctly?

I was supposed to post an article for the answers to the workers comp advanced article before Thanksgiving.  I decided to delay it one week as no newsletter was published last week either.

The associated quiz can be found at this link.  The article and newsletter readers requested that I separate the answers from the quiz so that a quiz taker does not have the answers sitting in front of them.  The readers always win.

1. The last Federal Government full study on the US Workers Comp system occurred in 1972.  The two persons responsible for publishing the study were John F. Burton, Jr. and President Nixon.   You can search the associated articles on this website by searching for Nixon in the search box.
2. Forty-one states use NCCI as their rating bureau.
3. Workers Comp subrogation funds are sometimes “left on the table” and not pursued to the fullest extent possible.  In the 1990s, a shift was made to make Workers Comp adjusters more specialized.  Prior to that time, many insurance adjusters were trained as all-lines adjusters which provided experience in liability claims handling.  Subrogation was “trained knowledge” to most adjusters.  Our claim reviews indicated that subrogation was being passed over by claim adjusters that were not trained in any area of liability insurance beyond workers comp.  The best way to track these funds as an insured is to use a subrogation diary.  Check this article out for more info.
4. The third largest foreign company investor in US Securities is the United Kingdom.  The two largest countries are Japan followed by China.  The insurance markets can be affected by the movement of these investments.
5. The yearly report required by the SEC for insurance companies is the 10-k.  One can discover huge amounts of information from these reports.   See this webpage for more info.  One can find many interesting numbers in these SEC-required reports.
6. The neutral Experience Modification Factor is 1.0.  The 1.0 means that an employer that has a neutral factor will not receive a credit or debit modification factor. The insured has the same loss experience as what the rating bureau has determined as the expected losses for their size.
7. An insurance company bankruptcy is referred to as being placed in receivership.  That state’s Insurance Commissioner determines when an insurance company is placed in receivership.  One rule of thumb is an insurance carrier that has less than 15% in reserves to pay claims becomes a concern to the Insurance Commissioner.
8. An insurance carrier can perform a workers compensation premium audit on the policy for three years after expiry.  California allows the carrier to only perform a premium audit for one year in the past or 1/1/2022.
9. Employers are unfortunately placed in Assigned Risk Pools for many reasons.  The bottom-line reason is that no voluntary market exists for the type of employer.  We had a reader email us a few years back asking why they were placed into a risk pool even with a low Experience Mod.  One of the most frustrating reasons for employers is that carriers are not writing workers comp insurance for a type of employer in a given state regardless of the Modification Factor.  Trucking companies and Temp agencies are two examples of companies that had no voluntary insurance carriers in certain states.
10. Texas allows employers that qualify to opt-out of their workers compensation system.  The employer is referred to as a non-subscriber.
11. Answer to the Workers Comp Advanced Quiz Bonus #1 –  The Institutes are located in Malvern, PA.
12. Answer to the Workers Comp Advanced Quiz Bonus #2 – Yes, no one should be discouraged from achieving a high level of success even without possessing a college degree.

The recommended list of methods for success are:

1. Working your way up from the bottom.
2. Obtaining designations from the Institutes.  See #11.
3. Finding a mentor.
4.  Having insurance industry expertise in another line of insurance.
5.  Obtaining your license immediately.
6. Having a good work personality.
7. Being professional at all times.

If you had all the answers to the workers comp advanced quiz, you are very knowledgeable – congrats to you!

Related:

Insurance Designations – Complete List with Updates