Experience Mod Audit
Lowers Mod 17 Points & Returns $33,150 to Grading Contractor
Insured
The grading contractor employs 42 people and has annual revenues of approximately
$3 million..
Situation
The company had been with the same broker for 21 years. At no time had the
broker audited or verified the insured’s Experience Modification Factor
and has routinely accepted the Mod Worksheet provided by NCCI as accurate
and correct. The company’s Mod was 1.40.
Assessment
Recognizing that mistakes are common in Experience Mods, Certified WorkComp
Advisors (CWCA) performed an audit of the current Mod and found a number
of errors that were adversely affecting the Mod. Several high-severity claims
were still listed on the Experience Mod worksheet containing the full reserves,
even though they had been closed for two years and reserves decreased. In
addition, the previous year’s policy payroll – which was significantly
lower than the audited payroll - was being used to calculate the Mod, further
inflating the figures.
Solution
CWCAs did a complete and thorough audit of the Experience Mod correcting
all payroll and claims that were inflating the Mod. They sent all new information
to NCCI and as a result, the Mod was lowered by 17 points.
Result
By working with the CWCAs, the company saw a drop in the Experience Mod
from 1.40 to 1.23 and the company also realized an annual savings of $11,050
with a three year estimated total savings of $33,150. |