The Stakes: A new home construction employee suffered a finger laceration. It was a bad cut, but the insurance carrier reacted by setting the reserves at the absolute maximum—accounting for potential disfigurement and permanent loss of use.
The Investigation: The Advisor knew that carriers often set high reserves and forget about them. These inflated numbers sit on the books, driving up the Mod, even if the money is never spent.
The Breakthrough: The Advisor monitored the case weekly. As soon as the employee returned to full duty, they demanded the disability reserve be removed. Once the scarring payment was made, they demanded the disfigurement reserve be removed.
The Result: By aggressively managing the file, the reserves were lowered by $57,000 before the critical valuation date. This saved the client 19 points on their Mod and over $4,000 in premium.