Current through 2024-38, September 18, 2024
A. Performance
Standards:
(1) Servicing carriers shall
establish timely, and to the fullest extent possible accurate, medical and
indemnity loss cost estimates commensurate with all factors known and
developed;
(2) Estimates of
reserves shall be revised whenever payments are made or developments occur that
cause changes to the ultimate loss projections;
(3) In reporting estimates on fatal and
permanent total cases, servicing carriers shall use tables authorized by the
Superintendent of Insurance;
(4)
Reserve estimates shall reasonably consider all contingencies involved in a
claim, including but not limited to survival and mortality, recovery and
morbidity, remarriage, return to work, escalation, and the time value of
money.
(5) Reserving of Pool cases
shall use consistent methodologies. Servicing carriers shall ensure that these
practices are followed consistently within their internal organizations among
claims adjusters, supervisors, and managers. Carriers shall have their
reserving practices documented in a way that will ensure they are consistently
applied, and shall make these documents available for review by the Pool at the
Board's request.
(6) Servicing
carriers shall keep the Pool apprised of changes in methodologies on an ongoing
basis.
B. Annual Report
of Servicing Carrier Practices. The Board shall conduct an annual review of
servicing carrier reserving practices and procedures, and issue a report which
shall be submitted to the Superintendent of Insurance and to the Pool on or
before April 1 of each year. The report shall include a review of actual claim
files and comparison of actual and projected incurred costs. Appropriate
sampling procedures may be used in conducting the claim file review. The review
shall include the following areas:
(1)
Conformity with performance standards. Servicing carriers shall make their
reserving practices available for review by the Pool at the Board's
request.
(2) Consistency of
reserving practices,
(i) applied to
individual cases, and
(ii) among
servicing carriers;
(3)
A review and evaluation of case reserves established by each servicing carrier
in relation to the information that was known or should have been known at the
time of the filing of the reserve;
(4) The timeliness of case review and the
payment of claims;
(5) Subrogation
practice;
(6) Overall claim
management and cost control measures;
(7) Consultation with the Pool's auditor(s)
and actuary(ies);
(8) Other
relevant areas selected by the Board.
C. The Board shall require its auditor(s) to
report on servicing carrier reserving practices to the Pool after the
completion of each annual audit cycle and in support of the Annual Report of
Servicing Carrier Practices.
D. The
Pool's actuary(ies) shall be required to meet with servicing carrier claims
managers at least annually to review reserving practices as they relate to:
(1) the preparation of the Annual Report of
Servicing Carrier Practices, and
(2) the Pool's annual actuarial
projection;
