The deluge of Covid-19 lawsuits against employers once feared at the beginning of the pandemic has fortunately not materialized and NCCI’s rule change will exclude Covid-19 related claims from experience rating calculations. However, Covid-19 has had a drastic impact on backing up the court systems and claims are staying open longer, becoming more expensive, and taking longer to get resolved.
This places an even greater importance on agencies to monitor open claims to mitigate their affect on an insured’s experience mod. The purpose of this blog is to review the timeline for when your claims data is submitted to NCCI and what we as agents can do prior to your data being submitted.
Losses included in the first reporting of a given policy must be valued as of 18 months after the month in which the policy became effective. Subsequent reporting of loss data (2nd–10th) must be valued 12 months after the valuation date of the preceding report. Each report level must be filed no later than two months after the respective valuation date. Please refer to the following chart for specifics.
For example, claims data from a policy effective 1/1/2020 will be submitted to NCCI somewhere between 7/1/2021 and 9/1/2020. Once your data is submitted to NCCI it is that data that will be used to calculate your experience mod for the coming year. It is extremely rare for NCCI to reevaluate and update progress on a claim after your data has been submitted.
For this reason, it is important to ensure the following prior to your data being submitted:
- All dubious claims are thoroughly investigated prior to data submission date.
- All open claims are reviewed with the claims adjustor to ensure the reserves are as minimal as necessary.
- For some claims, it might be necessary to include the attorney defending the claim and discuss the probability of prevailing. Even if the exposure for the claim is large, a high probability of prevailing over a fraudulent claim could justify a claims adjustor lowering the reserve of an open claim.
These are not fail safe strategies and going through these steps will not always result in reducing open claim reserves. It is always worth trying though because this data directly effects your experience mod and could result in higher premiums and potentially preclude insured’s from bidding on jobs if your in an industry that requires experience mods 1.0 or below.
Risk Management-Property & Casualty Advisor