California – WCIRB Over-reserving Correction – No Really, They Do


WCIRB Over-reserving Correction – Rating Bureau Helps Out Employers – Wow!

California’s Workers’ Comp Insurance Rating Bureau provides a great assist to employers. The WCIRB over-reserving correction algorithm helps employers greatly. Kudos to them – read on to see how they provide a safety net to employers. 

If you are not that familiar with the WCIRB or rating bureaus, check out this article. And if you happen after reading this article, to want to know more, yes, there is a webinar on the subject in May. The webinar (freebies) info is provided later in this article.  

WCIRB Over-reserving Correction – The Cool Rule 

I had long forgotten about this rule that shows the WCIRB helps employers out in a roundabout and under-the-radar way that goes totally unnoticed. Below is the rule that can be found here on their website. By the way, I do not like referring to the WCIRB as “it or its.”  Rating bureaus are comprised of a group of people = their. 


If the aggregate value of all closed claims that are required to be used in the experience rating are valued collectively at an amount that is less than 60 percent of the aggregate of the highest value at which each closed claim was previously used in a rating, then the experience rating may be revised using the most current reported values. Experience modifications will not be revised pursuant to the Closed Claim rule if it results in an increase to the experience modification.

When a claim is first reported by an insurer as closed on a unit statistical report, the WCIRB automatically reviews the policyholder’s current and two immediately preceding experience modifications to determine if they should be revised pursuant to the Closed Claim rule. As necessary, revised experience modification(s) are automatically published and the insurer is notified.


This rule sounds like actuaries created it – right?  I am joking. The WCIRB’s personnel have been nothing short of excellent in customer service over the years in all my interactions with them. Let us look at a few of the terms in the rule. 

  • Aggregate value – a total of all closed claims  
  • 60% is the most important number in the calculation
  • 40% is the other important number 
  • Closed claims only for the current year
  • Cannot increase your Experience Mod (X-Mod) – only for reduction (reduced premiums)
  • The insurer is notified of the change – but not the employer
  • Instances where over-reserving may not be the cause – subrogation recovery and rarer circumstances

WCIRB Webinar Next month on Closed Claim Rerates 

Example – I have an example that would only cause confusion. No example, so this is where the webinar in May comes into play – you can find out better examples there. I will refer back to this article or update this article after the WCIRB webinar in May.  

Graphic Emblem Mod Talk WCIRB over-reserving correction

(c) WCIRB of CA

You can register here – totally worth the time spent. The webinar is on Thursday, May 20, 2021, from 10:00 AM – 10:30 AM Pacific Time. I will let the WCIRB provide the example.  

I covered the subject of how to tell if your workers’ compensation files have over-reserving in this article

The key is your company needs online access to your claims so that you can follow the reserving and print your own loss runs

This blog post is provided by James Moore, AIC, MBA, ChFC, ARM, and is republished with permission from J&L Risk Management Consultants. Visit the full website at

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