Review of Experience
Mod saves over $25,000
Insured
A family-owned building contractor located in central California with 15
employees that did $2,000,000 in business in 2004. The contracting company
is one of several businesses owned by individual members of the same family.
Situation
Experience Modification Factor jumped, for no obvious reason, from 0.99
for 2004-05 to 1.27 for the current year. The insured decided it was time
to re-evaluate his WorkComp policy.
Assessment
After speaking with the insured to obtain a better understanding of the
operation, a Certified WorkComp Advisor (CWCA) performed a basic review
and developed a projected Experience Modification Factor. He then compared
the contractor’s 2005-2006 Experience Modification worksheet from
the Workers Compensation Insurance Rating Bureau (WCIRB) to his projection.
The comparison revealed a startling discrepancy.
Solution
After examining the discrepancy, it was determined that the WCIRB had been
co-mingling statistical data from a company owned by another family member
with that of the building contractor. Correspondence was initiated with
the WCIRB identifying the separate and non-combinable ownership of the companies
and offering the CWCA’s projections of what the corrected experience
modifications should be.
Result
The WCIRB agreed with the CWCA’s findings. It adjusted the contractor’s
Experience Modification Factor for 2005-06 from 1.27 to .87, which resulted
in the employer saving $9,343 on its WorkComp premium. It was also discovered
that the Board had made the same error in the previous year, so it also
retroactively adjusted the 2004-05 Experience Modification Factor from .99
to .85, which resulted in another savings of $15,689. The total WorkComp
premium savings for the insured came to $25,032. |