Regulatory compliance, including the reporting of information to various bureaus, is a critical function to all insureds and insurers. In this article, we’ll discuss an issue that often flies under the insured’s radar: data reporting requirements for workers’ compensation insurance policies. The National Council on Compensation Insurance (NCCI) is the country’s largest workers’ compensation data collection and rating bureau. Several states maintain their own individual WC bureaus (CA, DE, IN, MA, MI, MN, NC, NJ, NY, PA and WI), each with their own unique data requirements.
All workers’ compensation policies need to be filed with the appropriate WC bureau for each state in which coverage is provided. Because states mandate workers’ compensation insurance (or approved self-insurance) for all employers, filing and proof of coverage is necessary to keep both insureds and insurers in good standing. If incorrect or incomplete information is reported, or the policy details are filed later than the state-specific deadline, fines or criticisms can be issued to the insured or the insurance company. Since policy reporting sets the stage for the Unit Statistical Reporting, accuracy is critical.
Unit Statistical Reporting
The reporting of information collected during the premium audit of the workers’ compensation policy 18 months after its inception and then annually for nine years is known as Unit Statistical Reporting (USR). USR is the mechanism used by an insurance company to report audited exposure and premium along with detailed claim history to the rating bureau on a very specific time-table. Reporting on this very specific time-table, a USR report works as a snapshot of what is happening with the policy’s claim activity. The policy and claim data that is gathered through statistical reporting will not only affect nationwide rate making, but will also provide the basis for statistically developed rating factors such as the Insured’s Experience Modification Rate, the Expected Loss Rate, Ballast, and others to make the worker’s compensation machine run.
Financial Call Reporting
In addition to Unit Statistical Reporting, bureaus require specific loss and premium data from the respective insurance companies via quarterly, annual, and semiannual financial calls that can take place up to 30 years after policy expiration. These calls include requests for a wide array of data, ranging from general to highly detailed information. The bureaus use this information to determine the overall rate level for a state and confirm the accuracy the rate making data (USR). Policy year and calendar-accident year call data is also used to develop industry, location, and severity trends.
For example: to determine if the legalization of marijuana has increased “under the influence” workers’ compensation claims, the bureaus might require specific reporting of the details of claims for their analysis. Financial call reporting is compulsory to insurers and the data must be accurate.
Accurate and timely worker’s compensation data reporting, including payroll, premium and claims data, is essential for keeping both the Insured and insurer in good standing with the various regulatory bodies To learn more about the reporting requirements of the various bureaus, visit the NCCI website or contact Old Republic to speak with an Account Executive.
Ali is a Vice President, Account Executive with Old Republic Risk Management. She is responsible for leading the relationship with clients and brokers by marketing and underwriting casualty insurance programs for large corporations and group captives in the risk management marketplace. Ali assists Old Republic's efforts in the Midwest region.