The Process of Fixing Current Mods – Waiting Too Long to Begin
Employer questions spike concerning the process of fixing current Mods. It is that time of year again. Most school years are starting. The long, hot summer will not be around much longer for most of the US.
Insured employers receive their Experience Mods. The Mod reveals a number that must be corrected (?) for many reasons. A few examples are:
- Loss of contracts even with an Experience Mod of 1.01
- Increased premium with a Mod spike
- May have to go into the Assigned Risk Pool
Fixing Current Mods – The Usual Unsuccessful Process
The fixing current Mod process usually occurs this way:
- Employer receives Experience Mod Sheets from the Rating Bureau (NCCI, WCIRB, and others)
- Employer realizes that this Mod will not do for its upcoming policy renewal
- Agent/Broker contacted – what can we do about fixing the current Mod?
- Agent/Broker sends claims loss run to employer – should have had online access
- Employer wants to lower reserving on some of the files on claims loss run
- Employer calls agent to see if they can assist or calls the insurance carrier directly.
- Rarely, but sometimes the agent or employer gets the insurance carrier to reduce reserves on a file
- Agent or Employer requests another Mod sheet from Rating Bureau
- Same Mod – what happened to the fixing current Mod process? Confusion reigns
Answer = Timing
Why did the #7 reserve reduction not even cause a slight change? As the old saying goes – time is of the essence.
The current Mod comes from a delayed system.
The Mod sheets were almost set in stone, as the file reserves that affected the Experience Mod had two main things happen that can be difficult to reverse.
- The previous three policies contained the claims’ basis for the Mod.
- The numbers were Fixingpegged in at 180 days after the last policy expiry.
- The above example #7 may have helped with a Future Mod on the subsequent policy renewal – not the renewal coming up.
Share-Alike License 2.0 – Lin Zhizhao
Confused?
Check out the next article on where to spend just a few minutes to remove the confusion -provided by the rating bureaus at no cost.
