I recently met with a trucking prospect whose experience mod took a serious increase from 99 to 128%. The cause of this issue was one smaller claim (total incurred of $3,600) that was left open with more than half of the incurred being reserves. Now, reserve levels should be looked at by your broker and the company at about 5 months into any policy period to make sure they are at their lowest possible levels prior to the information being sent into the WCIRB for modification calculation purposes.
Together we thought that the claim should have been closed long ago and the prospect gave me a Broker of Service letter so that I could go to the company and investigate what, exactly, was going on with this claim. This occurred 12 days before his renewal date with the very common insurer here in California.
Once we had access we requested the information along with a demand that this claim be closed for cause (that cause being that it was, in essence, settled with no further payment), as it should have been closed prior to the calculation date, but was just sitting on some claims examiners desk as a pad for his or her coffee mug.
I was able to get the claim closed before renewal and wrote him with a different carrier on renewal using the 128 modification. I then requested that said huge carrier report the corrected claims information to the WCIRB for recalculation purposes. You are allowed a recalculation when your incurred is reduced by at least 60% in any one calculation year (this claim being in his first calculation year and apt to effect his mod for 3 years in total). Which means that if your incurred (paid and reserves) are say $10,000 in a given year, and we can go back and close the claims for actual paid of $5,999 or less, then the law states that you are to be recalculated at a modification that is more indicative of your true losses. In this case the recalculation came back with a mod of 93.
This may not seem huge to most people, but the two faxes and three phone calls made by a Professional Work Comp Advisor on his behalf saved this insured $16,500 in the first year, and nearly that amount for two additional years it would have affected his modification, resulting in a savings of $45,500 over the life of his calculation period.
The bottom line is that the time period in which problems are spotted and the correction is implemented and resolved, in some of these issues, can be as short as 18 days. You just have to have the right person looking at it, with the necessary information for them to do something about it.
If you have an issue, any issue concerning your workers compensation, get a certified Professional Work Comp Advisor to help you.
Guy Teafatiller PWCA