Financial Call Specific Reporting Topics

Transcription

1 Financial Call Specific Reporting Topics January 30 February 2, 2018 Palm Beach County Convention Center West Palm Beach, FL The Path to Data Excellence

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3 Financial Call Specific Reporting Topics Presented by: Brian Barnett and Ashley Jomant Objectives Provide an in depth overview of the Premium Components Chart Review special premium and loss components Prepare for specific upcoming Call changes Discuss what items are included in Call 8 2 1

4 Agenda Premium Components Chart Premium Reporting Loss Reporting Specific Call Specific Reporting Call Reporting 3 Premium Components Summary Chart 2

5 Components Chart 5 To Include or Exclude, That Is the Question! Many components go into premium calculations Depending on which premium column you are completing the chart shows how to handle the various components 6 3

6 Premium Components Balance to Minimum Premium TX Certified Health Care Network Expense Constants Increased Limits Premium Schedule Rating Adjustments Consent to Rate Premium Managed Care Programs 7 Balance to Minimum Premium When DSR Level Is Rates When DSR Level Is Loss Costs Component Net Company Standard DSR Company Standard DSR 2Balance to Minimum Premium Adjustment[**] X X X X [**] Do not include in DSR Level Premium for Texas. Solving common issues: do not include the adjustment in DSR premium in a loss cost state Include the adjustment for all premium levels in rate states Include the adjustment for net and company standard levels in loss cost states Exclude the adjustment for voluntary business in a loss cost state and in Texas 8 4

7 Company Selected Expense Constants Component Net Company Standard DSR Company Standard DSR 9 Expense Constants: Company Selected Expense X X X Include the adjustment in Net and Company Standard premium levels in rate and loss cost states When DSR Level Is Rates When DSR Level Is Loss Costs Solving common issues: do not include the Company Selected Expense Constants in DSR premium in any state 9 NCCI Published Expense Constants When DSR Level Is Rates When DSR Level Is Loss Costs Component Net Company Standard DSR Company Standard DSR 10 Expense Constants: NCCI Published Expense X X X Solving common issues: do not include the NCCI expense constant in DSR or Company Standard premium in loss cost states Include the adjustment in Net, Company Standard, and DSR premium levels in rate states Exclude the adjustment in Company Standard and DSR premium levels in loss cost states In Texas, and for loss cost states for voluntary business only, NCCI doesn t publish an expense constant 10 5

8 Schedule Rating When DSR Level Is Rates When DSR Level Is Loss Costs Component Net 28 Schedule Rating and Other Prospective State Specific Rating Adjustments X Company Standard DSR Company Standard DSR Include the Schedule Rating adjustment in the Net premium only Shows on Calls 10 and 10T (will discuss later in presentation) Solving common issues: do not include the schedule rating in DSR or Company Standard premium in any state 11 Managed Care Programs When DSR Level Is Rates When DSR Level Is Loss Costs Component Net Company Standard DSR Company Standard DSR 19 Managed Care Programs: Managed Care Credits X X X X X Solving common issues: include the Managed Care Credits in ALL premium types in all states Include this adjustment in all premium levels Examples of state specific programs include: Colorado Designated Medical Provider Program Georgia Managed Care Arrangement Premium Credit Program 12 6

9 TX Certified WC Health Care Network When DSR Level Is Rates When DSR Level Is Loss Costs Component Net 30 Texas Certified WC Health Care Network X Company Standard DSR Company Standard DSR Include the adjustment in the Net premium only Note:This is different than Managed Care Programs in other states Solving common issues: do not include the TX Certified WC Health Care Network in Company Standard or DSR premium types in any state 13 Increased Limits Premium When DSR Level Is Rates When DSR Level Is Loss Costs Component Net Company Standard DSR Company Standard DSR 16 Increased Limits Premium for Employers X X X X X Solving common issues: include the increased limits premium in DSR and Company Standard premium in all states Include the adjustment in all premium levels 14 7

10 Consent to Rate When DSR Level Is Rates When DSR Level Is Loss Costs Component Net Company Standard DSR Company Standard DSR 5Consent to Rate X X X Company Standard earned premium includes amounts attributable to consent to rate DSR Level earned premium only includes the premium at the regular rate; it excludes the additional premium due to consent to rate Solving common issues: do not include the Consent to Rate in DSR premium in any state. Include remainder of policy premium where applicable. 15 Consent to Rate Example State Approved Rate Payroll Premium (Payroll x Rate / 100) $5.00 $300,000 $15,000 Consent to Rate Amount Payroll Premium (Payroll x Rate / 100) $20.00 $300,000 $60,000 Premium Amounts Reported to NCCI DSR Premium CS Premium Net Premium $15,000 $60,000 $60,000 Consent to Rate Amount = $45,

11 Assigned Risk DSR Premium Level Reporting Assigned Risk DSR Premium Assigned Risk Company Standard Premium 17 Component Chart Fun! Yes! No! Yes! No! 18 9

12 Questions? 19 Loss Specific Topics 10

13 Subrogation and Second Injury Funds Subrogation type of loss recovery for a carrier where losses paid are recovered from a third party Paid losses Reduced for actual subrogation amount Case reserves Can be offset by anticipated subrogation recoveries Important: The amount recovered should not exceed the amount of the original Paid Loss. 21 Subrogation Reporting Example Valuation Medical Paid Indemnity Paid 12/31/2016 $50,000 $150,000 During 2017, there was $50,000 medical paid and $250,000 in anticipated subrogation 12/31/2017 $100,000 $200,

14 Lump Sum Settlements The actual lump sum amount is subdivided according to indemnity and medical If the subdivision between indemnity and medical is unknown or unspecified, use the case values prior to settlement adjustments to determine the prorated indemnity and medical amounts 23 Lump Sum Allocation Example Example: Claimant was granted 100,000 lump sum settlement with no specified allocation Indemnity Case Medical Case Valuation $50,000 + $150,000 = $200,000 Total 12/31/ % 75% Valuation 12/31/2017 Indemnty Paid = 25% of Total Case Apply a $25,000 Credit to Indemnity Paid Medical Paid = 75% of Total Case Apply a $75,000 Credit to Medical Paid 24 12

15 Deductible Reimbursements All experience (premiums, losses, and expenses) for deductible policies (other than large deductibles) should be reported on a gross basis (before the application of deductible credits or reimbursements). Exceptions: *Kentucky requires the reporting of all experience on a net basis. *Net premium and Call #19 and #26, which are reported on a net basis (after the application of deductible credits or reimbursements). 25 Employers Liability Claims Employers liability policy covers liability arising out of employees work related injuries that aren t covered by part one of a workers compensation policy Employers liability claims are combined and reported with the corresponding workers compensation claims on the Financial Calls Claims are reported the same way in the unit statistical reports 26 13

16 Employers Liability Claim Example Peter sustained severe burns to his hands while frying tamales on 6/20/2014. He files a workers compensation claim. (Claim #123) He also files a lawsuit claiming the fryer had faulty wiring and that caused the accident. Claim has $25,000 in Incurred Indemnity, $50,000 in Incurred Medical Employers liability lawsuit is claim #456 and has Incurred Indemnity of $600,000 This claim is reported as one claim on the Financial Calls with $625,000 in Incurred Indemnity and $50,000 in Incurred Medical. 27 Specific Call Information 14

17 Changes to Calls #31 and #33 For Call #31, large deductible policies with large loss claims ($500,000 and greater) will be included for all Call states, even TX. Large deductibles are defined as $100,000 and greater for all states excluding Oregon ($75,000) and Texas (deductible of more than $25,000 per claim/per accident, or $100,000 in aggregate). For Call #33, large deductible policies with large loss claims ($500,000 and greater) will be included (Virginia Coal Mine losses only). 29 Call #31 View 30 15

18 Calls #10 and #10T For Call #10, Texas will be added as a required state for the reporting of Schedule Rating and Other Prospective Premium Adjustments. Texas data must be reported at the carrier level, consistent with current Financial Call reporting for Texas (group reporting is not allowed). Call #10 includes the reporting of policy year accumulated earned schedule rating adjustment for the most current five policy years. Call #10T (Texas Policy Year Call for Schedule Rating Modification) will continue to be required, without any reporting changes. 31 Calls #10 and #10T 32 16

19 Call #

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21 Supplemental Information

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23 Presenter Biographies Ashley Jomant joined the Financial Data Team at NCCI in mid Prior to NCCI, she worked on an actuarial team reporting Financial Calls for a workers compensation insurance carrier and also held a variety of roles in PEO and treaty underwriting. She is currently a Senior Data Analyst for the Financial Data Team in the Data Quality & Compliance Services Department. Her primary responsibilities include serving as the Assigned Risk liaison, reviewing carrier deviations, validating aggregated financial data, and providing customer support. Ashley has a bachelor s in Mathematics, with a minor in Statistics, and a Certificate in Actuarial Science from Florida Atlantic University. Brian Barnett has worked at NCCI for 17 years. He is currently a senior data analyst for the Financial Data Team in the Data Resources Division. His primary duties include serving as a lead in the New Hire Mentor Program and performing data validation for complex carriers. Brian has a bachelor s of science in Geographic Information Systems from Florida Atlantic University.