WCIRB Worksheet is MVP
Most employers believe that analyzing their loss runs will allow them to understand how their workers compensation claims will affect their premium, and to a point they are correct. But the most important and valuable piece of paper concerning your companies claims and modification is really your WCIRB Modification Calculation Worksheet (I know it is a mouthful and I will refer to it as your mod worksheet). This document outlines the claims and payrolls reported to the WCIRB for use in calculating your mod.
I am not going to go into the entire mod calculation formula, as this would take days and more bandwidth than is available, lets just say that it is two full pages of formula. The important part is that the information on this worksheet match the payroll information you have provided the insurance company (check your final audit figures) and that the claims values match the loss run from the time periods in question. Insurance companies are supposed to report the claims values six months after the expiration of your policy. i.e. if you expire on 1/1 then they will be reported from July 1 to July 30 of that same year. If you have any outstanding reserves on open claims, these are counted as if the insuring company has spent that money already. It is most important to make sure that the reserve levels are reasonable and that closed claims get reported as closed in the months leading up to the six month calculation reporting period for all of the three policy years involved in the calculation. If not, then you are probably being over charged on your future premiums (and sometimes past premiums) because the information is incorrect.
And for those who believe that this could never happen, or have never examined this Most Valuable Paper, it has been known to be wrong (good or bad) in about 30% of all cases.
It is probably best that you find a Professional Work Comp Advisor, someone who specializes in this arena, to analyze this information for you. Contact me and I will gladly review this information and give you guidance on how to reduce your mod, or make corrections on your worksheet. At the very least, you should be receiving this very important document from your broker or insuring company every year about 2 months prior to renewal.
