|
Related Topics Organizing for CompliancePerformance TrackingYear 15
|
Workers Comp System in California
At LISC's Asset Managers Network in November 2002, participants met with Wendy Waggener from the Workers' Compensation Insurance Rating Bureau (WCIRB), and learned a great deal about how the workers' comp insurance industry is structured in California. First, about WCIRB itself: WCIRB is a private organization, designated by the State Insurance Commissioner to collect and analyze statistical information from insurers. In order to write workers' comp insurance policies in California, a company must become a WCIRB member and report data to WCIRB, including payroll/exposure information and information about claims and losses.
With the data it collects, WCIRB defines job classifications, and refines these from time to time, and publishes "pure premium rates" which estimate the cost of benefits and loss adjustment expenses an insurer will expect to pay for every $100 of payroll in a particular job classification. WCIRB also calculates and publishes experience modifications for individual employers. A 100% experience modification rating means the employers loss experience matches the average; a rate greater than 100% means losses have been greater than average. At our meeting, Wendy Waggener showed two charts that quickly illustrated unfortunate trends in the workers comp insurance market from lows in mid to late '90s, both the rates charged, and the losses paid, by California carriers have increased tremendously. Click here to see these "WCIRB Charts". For a detailed explanation of WCIRB's role in the industry, and other information, visit their website at www.wcirbonline.org and click on Frequently Asked Questions.
At the Network meeting, asset managers asked numerous questions about job classifications. There is a particularly thorny issue about resident employees, who have a higher workers comp rate than non-residents, whether or not they reside at the site where they work. Another discussion point was about how property supervisors are classified. Both of these issues illustrate the importance of having an insurance broker who is familiar with the WCIRB. In addition to the advice about dealing with a knowledgeable broker, Wendy Waggener made two other key recommendations:
* Be well informed about job classification rates, and keep good records to support favorable classifications. For example, workers in senior housing fall into a more favorable classification than those in multifamily housing. If a worker splits time between housing types, it is important to document this, because in the absence of documentation the carrier will assign the full payroll to the higher classification.
* Carefully review your company's Experience Modification worksheet, and in particular, monitor progress on resolving open claims. Begin looking at the Experience Modification sheet as early as three months prior to the renewal date for your policy.
Click Here to Comment...
|
