J&L Risk Management Consultants – Our 22nd Year – Thanks!!!

May 2, 2017 By JL Risk Management Consultants

J&L Risk Management Consultants Begins 22nd Year of Service

I started J&L Risk Management Consultants (originally called JLM Services) in 1995. The old adage of “started on the kitchen table” applies to the 25 year plan created in one weekend with much hope and a large amount of coffee

We originally marketed to now defunct spinning mills in North Carolina’s heart of clothes manufacturing. Those plants and mills have long since moved out of the United States. J&L was left holding the bag on quite a few of our billings when we first began our journey.

The market spoke up to advise me there were many more services to offer than just claims handling and claims file review services. With my actuarial background, the spinning mill owners brought me their policies to explain to them how the insurance carriers charged for services. Those same owners brought their premium audits as most of them did not understand how the charges were being assessed at each premium audit.

They also brought their Experience Rating Sheets to see if the E-Mods were correct. That was some time ago.

Thank You Graphic J&L Risk Management Consultants In Purple Background

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I started the blog with an article on CompScreen(R) in 2007 after attending a conference in Atlanta on Social Media. Our weekly newsletter soon followed in 2008. Many article readers of mine asked that I put together the newsletter as a way to quickly read the articles without having to visit the website every day. Once again, the market spoke up.

We have never placed any advertising ; charged anyone for premium content; or charged anyone to make copies of articles. A backlink to the article, blog, or website paid the corporation/me well enough.

After publishing over 1,800 articles on the blog, we took on the task of trudging back into the past and correcting/spiffing up the articles. We also removed a large number of notice-type and redundant articles. A blog consultant painstakingly restructured many of the articles as they were originally scrambled and added graphics to “un-bore” the blog – Thanks Erica!!!

Thanks to everyone for reading the articles, newsletter, and my articles that are reprinted in the blogosphere. James J Moore J&L Risk Management Consultants Inc.

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Workers Compensation Records Retention Question

April 7, 2016 By JL Risk Management Consultants

Workers Compensation Records Retention

The subject of Workers Compensation Records Retention is not as popular pre-2010 for some reason. We do receive a question on this topic every few months.

Workers Compensation mail headaches was covered a few years ago. I recommend reading that older article.

We received the question – How long should we (employer) hold onto Workers Compensation records such as policies, premium audits, claims info, Experience Modification sheets, and other similar records?

That is a tough “overall” question to answer as each state has specific record requirements. The length of time to retain records can vary greatly.

The best overall way to handle the records is to digitize them and keep them forever. That does seem extreme. However, there are many Workers Comp files where the “disease statutes” kick in once an injured employee “has been diagnosed” with an occupational disease. Having claims records can be a make-or-break situation.

Document Workers Compensation Records Retention In Drawer

Also, when we perform any type of data analyses or forecasting, the more data there is into the past, the better that we can predict the future. Business cycles of up to 20 years are present in much of the data we have reviewed for certain clients.

This kind of goes against the current actuarial position of the most recent data holding more weight than very old Workers Comp data. Of course, this is a debatable point.

My advice to to retain all Workers Comp data permanently by digitizing it using a scanner. A scanner is a relatively cheap investment. Any of our clients that have Workers Comp data digitized has saved $$ on our services.

Most data arrives in digital form nowadays. Copying it to a reliable thumbdrive that has security will always have your Workers Comp data at your fingertips. Asking your agent to be a data storage provider is not the best advice. Agents do retain limited data for quite some time.

A 128gb thumbdrive such as the one in this article can be found for $35 or less. That size will hold approximately 1,664,000 pages of scanned data. Only having Workers Comp related data on the thumbdrive will save data retrieval headaches later.

Workers Compensation can be assigned to a certain person in the office to make sure all the data is in one place. Workers Compensation records retention can be an easy process unless you are searching for a piece of paper from 12 years ago.

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Loss Cost Multipliers Definition – Real Deal On Insurance Premiums

August 7, 2012 By JL Risk Management Consultants

The Real Deal – Loss Cost Multipliers Definition

The Loss Cost Multipliers definition (LCM‘s) is one of those “under the radar” concepts in Workers Comp. I had decided to comment on LCM’s as they are very important to your Workers Comp budget. The LCM allows the insurance carriers to charge whatever their actuarial and underwriting departments think is appropriate for each classification code.

Picture of Hand Shaking With Houses At Background Loss Cost Multiplier Definition

I received a question on LCM’s as an employer was confused as to why their insurance carrier was charging significantly above what was published in their state’s online rating bureau.

LCM’s are basically the insurance carrier’s deviation from the advisory loss costs that are published by NCCI or your state’s rating bureau.

The advisory loss costs are what each state has set for a Classification Code. Advisory loss costs do have a function. They are the basis for the Loss Cost Multipliers.

Picture Hand Presenting Real Deal Financial Concept

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Almost all carriers will deviate from the advisory rate by adding in a factor above the advisory loss costs. There are in rare instances certain carriers that will file for a LCM under the advisory loss costs.

The LCM’s are basically your company’s real insurance rate basis. The basic formula would be (certain classification code for a certain year)

Carrier’s Rate = Advisory Loss Cost (published by rating bureau) * LCM

One of the most confusing areas is certain carriers may have multiple named carriers that look similar, but have very different LCM’s they have filed for all or certain class codes. I wanted to try to make this the least confusing possible.

The main takeaway is the carrier’s filed deviations (LCM’s) from the advisory rates are the basis for what you pay in Workers Comp premiums. Some LCM’s are up to 211% of the advisory rate.

The bottom line is exploring the insurance market each year for quotes is usually a good risk management technique as a Workers Comp carrier can change their rates dramatically from year to year by filing a different LCM.

What Does Stair Step Reserving Mean?

May 11, 2011 By JL Risk Management Consultants

Term Of The Day – Stair Step Reserving

The stair step reserving of Workers Comp reserves is an age-old concern of any party to an insurance or TPA policy. If loss reserves are raised by increments in order to cover the cost of claims expense as they happen, the term stair stepping comes i to use. If the claim reserves were to be charted, the resulting graph would look like stair steps. This can also be known as reserve creep.

Picture of Woman Stair Step reserving Workers Comp Concept

The slang term amongst adjusters is reserving to pay bills or the next TTD payment. Stair stepping reserves is very harmful for many reasons:

Affect insureds E-Mod negatively
Self insureds will not have accurate Loss Development Factor (LDF)
Self insured client will not budget properly for future payments
Will cause actuarial or statistical work to have a built-in error
Use up adjuster’s time by constantly having to take time to increase reserves in system
Not giving reinsurers timely notice

Many years ago, some self insureds actually wanted this practice in place as to keep their Risk Factors low. This blew up in their face eventually as all files were reserved too low and id not reflect the risk of future payouts which is the underpinning for reserves.

Many Risk Management, insurance carrier, and TPA processing systems have a large amount of built-in redundancy to alert claim supervisors and managers to stair