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Q. What is a loss reserve?
A. A loss reserve is an estimated
amount of money that the insurance company sets aside to pay for a claim.
Loss reserves are used to evaluate the worth of each claim, based upon
the claims adjustor's judgment and experience in handling similar claims
and the potential for claims payment. Insurers are required by law and
WCIRB rules to establish these reserves for incurred claims.
Q. What is a workers' compensation surcharge?
A. An insurance company may surcharge
premium if it believes that additional money is needed to meet expected
losses and expenses for a particular employer. Consumers should ask
the insurer to provide formal documentation that reflects all the rating
components used to develop their premium. Surcharges are usually applied
only to high-risk activities with a higher-than-average loss potential.
Q. What is a minimum premium?
A. Basically, minimum premium is the
least amount for which the insurer is willing to insure an employer.
Each insurer files its minimum premiums with the rating plan to CDI.
For Example: An insurance company has set a minimum
premium of $500 for your type of business. Assuming your actual payroll
is only $20,000 with a manual rate of .78 per $100 of payroll, your
calculated premium would be $156 ($200 X .78). But you would still pay
$500 minimum premium instead of $156, since your insurance company has
set its minimum premium at that level. Thus you are encouraged to shop
around for the company with the lowest minimum premium if you have a
small payroll.
Q. Is there a penalty if I cancel my workers'
compensation insurance during the policy year?
A. If you cancel the policy before
the end of the policy term, you will pay a penalty. The premium will
be based on the time the policy was in force, and increased by a standard
short-rate percentage to cover company expenses. If the company cancels
the policy, the premium will be based on the actual number of days it
was in force (pro-rata). Also, your insurance company may charge you
the minimum premium when the calculated short rate premium is less than
its established minimum premium. Therefore, read your policy very carefully
regarding the final determination of premium upon its cancellation.
Q. What is participating policy?
A. If a policy is written on participating
basis, an employer may participate in the profits of the insurance company derived from its California workers' compensation business in the form
of a dividend. There are various types of dividend plans with different
provisions and requirements. Check with your agent or company for specific
details.
Q. Can an insurance agent or an insurance company
promise or guarantee the payment of a future dividend?
A. No. It is a misdemeanor for an
insurance company, agent or a broker to promise the payment of future
workers' compensation dividends. Under California law, the insurance
company's board of directors or other governing body must review the
overall loss experience of the workers' compensation business since
its last dividend declaration. This governing body then determines whether
the insurer has a surplus from which dividends may lawfully be paid.
Such dividends must be declared by resolution adopted after expiration
of the policy term. This declaration should specify the dividend plans,
formulas or schedules to be applied. Any person who makes or causes
to be made any knowingly false or fraudulent material statement or material
representation for the purpose of obtaining or denying workers' compensation
benefits or payments is guilty of a felony.
Q. What if I disagree with the classifications
assigned or rates applied to my business?
A. First, talk to your insurance agent
or broker or the insurance company. If you disagree with their explanation,
you may direct your complaint to the WCIRB (at its San Francisco address
listed in Exhibit II). However, you must submit a statement of facts
in writing, within twelve months after the expiration date of the policy
in question, including the name of your firm, the name of your insurance
carrier and the details of your complaint. The WCIRB will investigate
your complaint, contact the insurance carrier, and advise you of its
findings within 45 days.
workers pension
california | kaiser workers
pension | health
insurance workers pension|
worker pension
health net | PPO plans workers
pension | kaiser
group plans workers pension |
Anthem blue cross
workers pension | HMO plans
workers pension | Pacificare
workers pension |
Blue shield
workers pension
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