Worker's Compensation Insurance

21 Title 10, California Code of Regulations (CCR) §§2509.40 – 2509.78 list detailed procedures for disputing experience modifications and classification assignments, including appeals to the CDI. Please contact the CDI through the information given in the “Talk to Us” section of this brochure when you experience workers’ compensation rating and underwriting difficulties. In most cases, we can assist consumers in resolving workers’ compensation issues regarding rating and underwriting. If it is determined that the CDI does not have jurisdiction, we will refer consumers to the appropriate state agency for assistance. Also, it is important to contact the CDI regarding any suspected workers’ compensation fraud. Fraud reports can be filed with the CDI on an anonymous basis. The more complete and credible the information, the greater the chance of apprehending and prosecuting those involved in workers’ compensation fraud. Frequently AskedWorkers Compensation Questions Q: What is a loss reserve? A : Insurance companies use loss reserves to evaluate the monetary worth of each claim. A loss reserve is an estimated amount of money that the insurance company sets aside, or earmarks, to pay for a claim. It is usually up to a claims adjuster to set the loss reserve, utilizing judgment and experience from prior claims that are similar. Adequate loss reserves help determine how much money an insurance company must have in surplus to meet current, emerging, and future claims obligations. Insurance companies must report workers’ compensation loss reserves, along with other claim reporting information, to the WCIRB, as this information is used by the WCIRB to calculate experience modifications. Poor loss reserve practices can put an insurance company in financial jeopardy, as both overestimating and underestimating loss reserves (to fund potential obligations) can lead to a misallocation of funds required to pay out claims, and creates an inaccurate picture of an insurer’s financial obligations. When there are not enough funds reserved to meet future obligations, an insurer’s solvency will be negatively impacted.