LESSON 3 OBJECTIVES. Page 1 of 26

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1 LESSON 3 OBJECTIVES Understand the workflow of how Financial Data is reported Take a step-by-step walk through of the Policy Year Call (Call #3) Learn how to validate, correct, submit and view financial call data through Financial Calls Online Find out about the new Financial Call Notification feature within Financial Calls Online Page 1 of 26

2 POLICY YEAR CALL EXAMPLE For purposes of this training, an explanation of Financial Call #3 Policy Year Call will be provided, along with a definition of its fields. Examples of the hard copy form and online screens found in Financial Calls Online will be referenced. The Policy Year Call is one of the first Calls due to NCCI and is used to determine the overall rate level for a state. As defined in Lesson 1, data collected in this Call includes earned premium and incurred losses for statewide business captured in a policy year timeframe. The Policy Year Call is due to NCCI by March 15 of the following year if submitted on hardcopy and by April 1 of the following year if submitted electronically. Data providers who submit financial data via hardcopy will incur hard copy reporting charges. For more specific instructions, filing requirements and charges, refer to the Reporting Guidebook for the Annual Calls for Experience. The Policy Year Call includes financial data for up to 21 policy years. Each policy year is separated by state on the hard copy reporting form and in Financial Calls Online. For each state, there are four separate pages and online screens. Page 2 of 26

3 POLICY YEAR CALL HARD COPY (Page 1) The following is the first page of a standard hard copy form used to report a Policy Year Call. Column six is shaded to indicate that most states do not have to report this data. Column seven is shaded to indicate that it is usually left blank. Page 3 of 26

4 Because several of the columns will be calculated automatically in Financial Calls Online after other columns have been entered with figures, it is recommended that Financial Call data be entered working from back (page 4) to front (page 1). The following chart will help you determine which columns should be keyed and which columns will be calculated automatically. If you key data in Columns... 23, 24, and , 16, 17, and 18 and answer "No" to Question A 13 and and 12 and answer "Yes" to Question A 9 and , 5, and 6 7 Then totals are calculated automatically for Column(s)... 5, 11, and 12 5 Note: If any calculated cell (this includes column totals) is manually altered and an uncalculated cell is subsequently changed, then the calculated cell will no longer produce automatic calculations. For these situations, the calculated cell will then have to be repopulated manually with the correct totals. Page 4 of 26

5 THE POLICY YEAR CALL (Page 1) The following columns of a Policy Year Call form that consist of Accumulated Earned Premium data include: Standard Earned Premium at NCCI DSR Reporting Level (Column 1) This field requires financial data on the accumulated earned premium resulting from approved NCCI rate and loss cost filings. Standard Earned Premium at Company Level (Column 2) This field consists of column (1) adjusted to reflect company specific deviations. Accumulated Net Earned Premium (Column 3) The Accumulated Net Earned Premium is column (2) adjusted to reflect discounts. Page 5 of 26

6 THE POLICY YEAR CALL (Page 1) The following columns of a Policy Year Call form consist of Incurred Loss data: Accumulated Paid Losses (Column 4) Accumulated Paid Indemnity + Accumulated Paid Medical Losses (Columns ). Accumulated Outstanding Excluding IBNR (Column 5) Accumulated Outstanding Excluding IBNR Indemnity Losses + Accumulated Outstanding Excluding IBNR Medical Losses (Columns ). Accumulated IBNR (Column 6) Accumulated IBNR Indemnity Losses + Accumulated IBNR Medical Losses (Columns ). Incurred Losses Including IBNR (Column 7) This includes the total of columns 4, 5, and 6. Page 6 of 26

7 POLICY YEAR CALL ELECTRONIC (Page 1) This is a view of the first page of a Policy Year Call as shown in Financial Calls Online. Note that the online version contains the same fields as the hard copy form. However column seven is shaded to indicate that it is always automatically zero filled when using Financial Calls Online. Page 7 of 26

8 POLICY YEAR CALL (PAGE 2) The following is the second page of a standard hard copy form used to report a Policy Year Call. Columns thirteen and fourteen are shaded to indicate that most states are not required to report this data. Page 8 of 26

9 POLICY YEAR CALL (PAGE 2) The following columns of a Policy Year Call form consist of claim count and incurred loss data: Incurred Indemnity Claim Count (Column 8) The Incurred Indemnity Claim Count (i.e., the accumulated number of claims for which an indemnity payment has been made and/or an outstanding indemnity reserve exists) must be reported for policy years 1981 and subsequent. Accumulated Incurred Losses (Columns 9 14) These columns are used to report accumulated total incurred losses (i.e., from date of inception through December 31 of the most recent year). The values are split into Accumulated Indemnity Losses and Accumulated Medical Losses. Page 9 of 26

10 POLICY YEAR CALL (PAGE 2) This is a view of the second page of a Policy Year Call when reporting electronically through Financial Calls Online. Note that the online version contains the same fields as the hard copy form. Page 10 of 26

11 POLICY YEAR CALL (PAGE 3) The following is the third page of a standard hard copy form used to report a Policy Year Call. Page 11 of 26

12 POLICY YEAR CALL (PAGE 3) The following columns of a Policy Year Call form consist of Loss data: Outstanding Excluding IBNR (Columns 15 18) Include an appropriate reserve for IBNR cases for losses reported by state. Report the IBNR reserve separately for indemnity and medical. Page 12 of 26

13 POLICY YEAR CALL (PAGE 3) This is a view of the third page of a Policy Year Call when reporting electronically through Financial Calls Online. Note that the online version contains the same fields as the hard copy form. Page 13 of 26

14 POLICY YEAR CALL (PAGE 4) The following is the fourth page of a standard hard copy form used to report a Policy Year Call. Page 14 of 26

15 POLICY YEAR CALL (PAGE 4) The following columns of a Policy Year Call form consist of claim and expense data: Paid Losses on Closed Claims (Columns 21 22) Report the accumulated losses paid on claims included in the closed (paid) claim count. Allocated Loss Adjustment Expense (Defense and Cost Containment) (Columns 23 25) The allocated loss adjustment expenses reported should be consistent with the incurred losses; i.e., reported on a direct basis excluding F-classifications, underground coal mines, excess policies, national defense projects and large deductibles. Page 15 of 26

16 POLICY YEAR CALL (PAGE 4) This is a view of the fourth page of a Policy Year Call when reporting electronically through Financial Calls Online. Note that the online version contains the same fields as the hard copy form. Page 16 of 26

17 FINANCIAL DATA REPORTING WORKFLOW The following is an overview of the major steps in the workflow for Financial Data reporting. By the beginning of each reporting season, data providers will have received their Financial Call Packets and the latest version of the Reporting Guidebook for the Annual Calls for Experience. Using these resources, data providers evaluate which Calls are required and when they are due. Next, the financial data for each required Call is created, entered and updated using Financial Calls Online or other available media. After the data is updated, it must be validated. This includes preediting the data against edits 1 embedded within Financial Calls Online or Financial Calls on Diskette software and making any necessary corrections. The validation will produce an error log, which provides the opportunity to correct and/or explain any data falling outside set tolerances. Once data has been corrected and/or explained, and is free of outstanding errors, the financial data is ready to be submitted to NCCI, again using Financial Calls Online or other available media. Submitted data is then edited at NCCI and reviewed by the Data Validation Team. If errors are detected, an error log is created and a notification is sent to the data provider for correction and/or explanation. After the data provider submits a correction or sufficient explanation, the data can then be used in the ratemaking 2 process. 1 Edits included in Financial Calls Online are more up-to-date than those included in Financial Calls on Diskette software 2 Only data submitted in a timely and accurate manner is used in ratemaking Page 17 of 26

18 The following is a visual of the financial data reporting workflow. CREATE FINANCIAL CALL DATA UPDATE CALLS VALIDATE FINANCIAL CALL DATA REVALIDATE FINANCIAL CALL DATA CORRECT AND/OR EXPLAIN ANY ERRORS REVIEW ERROR LOG SUBMIT FINANCIAL CALL DATA NCCI FINANCIAL DATA VALIDATION TEAM FINANCIAL CALL NOTIFICATIONS CORRECT AND/OR EXPLAIN ANY ERRORS RATEMAKING Page 18 of 26

19 CREATE FINANCIAL CALL DATA There are three different methods for creating Financial Call data. They include Financial Calls Online, Financial Calls on Diskette software, and hard copy. Financial Calls Online is the preferred method for entering Financial Call ratemaking data as it includes the most current edit structure. For training purposes, we will demonstrate the workflow for Financial Call data using Financial Calls Online. There are three methods for populating this tool with financial data, creating a baseline of a company s current year data. These methods are: Importing Financial Call data Financial Call data can be imported into Financial Calls Online using one of two specified record layouts to create the baseline data. The record layouts can be accessed though a link in the Financial Calls Online tool. Creating Financial Call data Original Financial Call data can be created through the Create a Call feature. Copying prior years Financial Call data Financial Call data for the current year can be created by copying the prior year s data from Financial Calls Online, when available. The prior year data is stored and accessible through Financial Calls Online. Page 19 of 26

20 UPDATE CALLS After the baseline Financial Call data has been created, the data may need to be updated with current values. To locate an existing Financial Call to update, use the Search Call feature within Financial Calls Online, and select the desired search criteria. This allows the user to update/edit the Call data in an existing Financial Call. The Search Calls feature allows the user to view all active data by Call or by state. Page 20 of 26

21 VALIDATE FINANCIAL CALL DATA Validation must be done prior to submitting Financial Call data. It provides the opportunity to catch errors early on and improve data quality. After Financial Call data is created and updated/edited, it is validated in Financial Calls Online. This is where the data is run against NCCI edits. There are two different types of edits that NCCI checks a company s data against, actuarial and basic. Data is validated only after all necessary changes have been made to the data. There are incentives through the Aggregate Data Quality Incentive (ADQIP) program for reporting high-quality Financial Call data to NCCI in a timely manner. Page 21 of 26

22 ERROR LOG After Financial Call data is validated, an error log is created. The error log identifies two types of errors, Critical Errors and other errors. Critical errors These errors appear in bold text at the top of the error log and must be corrected to avoid data being rejected when submitted. Other errors These errors require correction and/or and explanation The error log also: Lists all errors that were generated for the validated data Provides a description of the error identified and information on the specific field in error Provides an explanation field that can be populated when a valid reason can explain the error in question Page 22 of 26

23 ERROR LOG This is a view of the error log in Financial Calls Online. Page 23 of 26

24 REVALIDATE FINANCIAL CALL DATA Once errors have been corrected and/or explained from the error log, Financial Call data must be revalidated through Financial Calls Online. The error log should be viewed again after revalidating to ensure that all previous errors have been corrected. Page 24 of 26

25 SUBMITTING FINANCIAL CALL DATA Once Financial Call data has been revalidated and corrected and/or explained, it should be submitted to NCCI. Submitting is the last step in the workflow. If errors are not corrected and/or explained before data is submitted, NCCI will continue to notify data reporters until the data is corrected, possibly leading to ADQIP fines. Financial Call data may be submitted to NCCI through the Search Calls feature in Financial Calls Online. Page 25 of 26

26 FINANCIAL CALL NOTIFICATIONS After Financial Call data is submitted to NCCI, the Financial Data Validation Team reviews the information and notifies customers with any questions. Currently, the NCCI Financial Data Validation Team mails letters notifying data providers to make corrections or provide an explanation related to the issue in question. The data provider will then be required to manually make a correction and/or submit an explanation and subsequently report back to NCCI. Financial Calls Online offers an effective notification feature, which allows customers to view their questions online and then make corrections and/or enter explanations online while in the application. A notification is then placed into the notifications section of Financial Calls Online, and an is sent to the data provider letting them know that a notification is waiting to be reviewed. Page 26 of 26