Have you reviewed your loss runs lately? Do you know the importance of your unistat date? If your workers compensation policy renews on July 1, like many who use this as their fiscal year date, your unistat date, otherwise known as the unit statistical report date, is fast approaching! For July 1 renewal policies the unistat date is January 1. The unistat date is the date when all claim data is reported to the rating bureau for inclusion in the calculation of your experience modification rate or EMR that will be effective on your July 1 renewal. What’s the importance? Read on.
Claim data (claim dollar amounts reserved and paid) is gathered by your insurance company and sent to your rating bureau on the unistat date. This information includes all original claim reserves, dollars paid out, reserve adjustments both up and down and any claim settlements that may affect previously established reserve amounts. This data is then used in the experience rating formula which ultimately develops your individual experience modification rate (emod, xmod or EMR.)
The importance of knowing your unistat date is that it gives you the opportunity to examine the claim data that’s going to be used in your experience rating or EMR calculations. Once that data is reported to the rating bureau you will lose the opportunity to have corrections made. Well, that’s not exactly correct as that under certain special circumstances corrections may be allowed. But those are rare and difficult to obtain adjustments.
Take your knowledge of the unistat date for your business and use that information as best you can. Here are a few steps you should take:
- 3 – 6 Months Prior to Unistate Date – Ask your agent, broker or insurance company for a complete copy of your loss runs.
- Review Loss Runs – Review your loss runs by comparing them with the previous set you obtained. Look for changes in the amounts paid and particularly amounts reserved but not yet paid. You may want to ask for a claim review from a work comp consultant.
- Review Specific Claims – Pay particular attention to claims that show activity or that you may have identified as a concern.
- Communicate Your Concerns – Communicate with your claim adjuster on those files that you have identified as problematic. But be careful! You may not want to poke the sleeping beast!
Your goal is to come to agreement with the data information that is about to be reported to the rating bureau. Keep in mind that most employers are not schooled in the sophisticated practice of claim reserving practices. Raising the wrong questions at the wrong time may lead to an adverse adjustment only to be reflected in the data reported. So be careful! The wrong questions may actually lead to an increase in your EMR. You may want to seek out the help of a work comp consultant for some assistance with this part of your review.
To restate, your goal is:
- To make sure the data being reported to the bureau is correct.
Another, mostly unknown, benefit of your claim review is that you can get a look into the future of your experience rating or EMR. Once the claim data is reported to the bureau your EMR can actually be calculated. Not may insurance agencies or agents will be able to help you with that but most independent consultants can. This is a step that is almost never followed through upon and one that can be of great value to an employer looking to plan for the future. Wouldn’t it be nice to know what your EMR will be 6 months before it goes into effect?
The Take Away: Have an independent loss history/claim review conducted 3-6 months before your unistat or unit statistical report date.
Hope this has helped you out. Thanks for reading!