Insurance Data Reporting

What You Should Know About Accident & Health Data Call Reporting

by Jim Vallee

By: James A. Vallee, FSA, MAAA

Property & Casualty (“P&C”) companies entering the Accident & Health (“A&H”) marketplace often have questions about reporting policy, premium and claims data. It makes sense: as mandated by the NAIC, admitted P&C insurance carriers are required to submit data for statistical reporting for various commercial and personal lines products. However, though product filing requirements for P&C and A&H are similar, reporting premium and claims data is very different.

Here are answers to some of the most common questions our insurance data services experts receive when working with insurance companies looking to start offering supplemental A&H products as part of their portfolios.

Who are the statistical bureaus that monitor A&H insurance products?

Unlike P&C, there are no statistical agents or rating bureaus that require data to be reported for A&H coverages. Insurance companies with admitted P&C products must submit statistical data in greater frequency and detail to a bureau based on the specific line of business, such as ISO and NCCI. A&H doesn’t have the same requirements.

Certain lines of business like major medical (including stop-loss) and Senior market products (e.g. Medicare supplement, long-term care, and medical stop-loss) do have some reporting requirements, but it’s a much lighter lift with much less granularity than what must be captured for P&C coverages.

In addition, some states do issue data call requirements, such as California’s covered lives and Alaska’s yearly health insurance survey. Other states, like Washington, often have ad hoc data calls. Therefore, depending on where your insurance company conducts A&H business, you should be prepared for some data reporting requirements.

How to prepare for ad hoc data calls?

Preparing for potential state data calls means staying on top of tracking basic information, such as the number of policies and the amounts of written premiums and claims. Tracking this information throughout the year will ensure that you are ready with the required current data in the event of regulators’ published and ad hoc data call requests.

What are the statutory financial reporting differences for A&H?

When it comes to statutory reporting the Yellow Book’s annual blank, the Type of Insurance (“TOIs”) under which A&H products are filed do not match up to the Annual Statement Lines of Business like the P&C TOIs do. So, it’s not obvious where they should be reported. In general, A&H products need to be reported based upon market (Group vs. Individual) and policy renewability provision. To report the financials accurately for A&H products requires a depth of understanding these products.

How can Perr&Knight help?

We have an insurance data services team comprised of experienced actuaries and data analysts who have been helping P&C clients successfully manage complex reporting for decades. When P&C clients want to move into the A&H space, they often voice concerns about reporting and are surprised that the requirements are much less stringent than those to which they’re accustomed. Perr&Knight’s A&H product development expertise and data reporting makes us perfectly suited to provide the clarity your company needs to feel confident about meeting A&H data reporting requirements.

That said, there’s no substitute for basic data modeling, tracking and governance. Implementing a framework and best practice to capture and keep baseline data up to date throughout the year is not only smart preparation in case of an ad hoc A&H data call, but it’s also just good business practice.

Our experienced insurance data services team can help make your A&H data reporting seamless. Contact Perr&Knight today.

2022 Workers’ Compensation Financial Data Calls: What You Should Know

by Chris Curry

The 2022 reporting season is underway for workers’ compensation financial data calls to the National Council on Compensation Insurance (NCCI) and independent state workers’ compensation rating bureaus. This is a very busy season for reporting analysts and data quality staff who will need to aggregate, validate, and submit all the policy and claims financial detail for the year countrywide.

While there are very few changes in the calls and data capture this year, it remains important to keep tabs on updates from the bureaus. For instance:

  • The New Jersey rating bureau has issued a data call to collect COVID-19 pandemic data.
  • The California rating bureau is requiring the reporting of premium detail by month instead of year, starting with 1st Quarter, 2022.
  • Other rating bureaus have updated their front-end and back-end processes. For instance, NCCI updated its system interface slightly, and the NCCI template for uploading data into the financial call system has also been modified.

These are not significant changes but could affect your workflow and timing.

Companies should use the financial call reporting season as an opportunity to closely review their data collection, aggregation, and submission processes for weaknesses and to make updates accordingly.

Closer scrutiny

The rating bureaus have been implementing more edits and cross-reporting reconciliations in recent years and are therefore catching more data reporting inconsistencies. The risk of incomplete or incorrect data has always been an issue for carriers—deadlines are strict and penalties for late reporting can be substantial. With even greater scrutiny from the rating bureaus, carriers are under even more pressure to ensure accurate, on-time reporting.

Statistical and financial data analysis and reporting are non-revenue-generating tasks that can consume precious bandwidth. Timely, accurate reporting draws time and attention from staff whose focus is generally directed toward high-value tasks. As a result, many carriers opt to partner with reporting specialists like Perr&Knight. Delegating reporting to insurance data services experts alleviates the stress and seasonal time crunch of accurate data preparation and submission.

Common reporting problems

During decades of providing insurance data services for workers’ compensation carriers across the nation, we have seen companies run into issues that can complicate reporting and compromise accuracy. Here are some of the most common pitfalls companies experience:

  • Calculating designated statistical reporting (DSR) premium levels—specifically, applying rating modifications and loss-cost multipliers correctly—can be challenging. Different policy types, rating bureaus, and loss-cost adoptions can create different methods of calculation. Lack of experience with this calculation can result in incorrect DSR premium level reporting.
  • Difficulty understanding how deductible programs work. Some portions of deductible policies are not reported to the bureau. For example, large deductible policies and claims must be excluded from most calls, whereas small deductible policies are generally included.  Pay close attention to whether premiums and claims are reportable net of the deductible versus gross of the deductible when reporting. Plenty of carriers get tripped up here.
  • Issues related to comparisons between financial data and policy/claims data. Disconnects between unit statistical reporting (detailed audited premiums and claims reporting) and financial data calls will cause problems. Companies must uncover discrepancies and clear up edits in financial-to-statistical data reports before submission or risk penalties.

A head-start on accuracy

Working with experienced third-party support teams for reporting also ensures the cleanliness of data before submission to the rating bureaus. Before the Perr&Knight teams even submit data to bureaus, we aggregate all the required information and perform reconciliations to a company’s NAIC Annual Statement. If there is a difference, we work with our clients to resolve the error or create a detailed explanation for the bureau.

Offloading reporting to the experts at Perr&Knight protects against inaccuracy by ensuring all state-specific updates and requirements are taken into consideration. Our financial call reporting specialists make sure all the bases are covered.

The 2022 financial data calls show reporting is becoming more robust as it is further digitized. Data is under closer scrutiny and edits are stricter than ever. For many companies, working with a third-party insurance data services partner is the most efficient, cost-effective solution to ensure data accuracy and receive added support for this essential and resource-consuming task.

Offload this year’s NCCI data call to the reporting specialists at Perr&Knight. Contact us today to learn how we help.

Workers’ Compensation Underwriting: How Automated Tools Are Changing the Game

by Casey Tozzi

Underwriters and actuaries are under constant pressure to meet demands for increased efficiency and innovation. Though there are more data sources than ever, determining how best to balance data insights with underwriter expertise remains a challenge.
Where should risk management teams direct their focus?
How can underwriters achieve consistency?
Workers’ compensation presents unique complexities. With regulatory processes and large risk rating options that vary by state, workers’ compensation pricing creates an additional gauntlet of details that even experienced underwriters may struggle to manage. The need for comprehensive documentation means underwriters today are facing an uphill battle: how to efficiently make meaningful use of data to improve judgement, not cloud it.
In order for an underwriter to effectively do their job, they need automated workers’ compensation tools that provide quality benchmarks helpful for schedule rating credits and debits, retrospective rating, and large deductible plans. These insurance-specific tools help underwriters and insurance entities improve efficiency and provide data-driven documentation for compliance.
Here are three areas where automation can be a game-changer.

Large Risk Schedule Rating

Because large risks are big enough to be schedule rated, underwriters have ranges available to develop premiums. Large Risk Schedule Rating tools are a comprehensive, data-driven solution that can be utilized to assist underwriters with schedule rating debits and credits. These tools provide the following key features:

  • Consistency with company’s approved program
  • Insights on a particular risk relative to the average risk contemplated in the bureau rates
  • Data-driven results for underwriters
  • Built-in documentation 

Retrospective Rating

For risks who elect to have their premiums based on their actual loss experience during the term, underwriters will need to determine the initial premium and all the necessary parameters that will apply at future adjustments.
Retrospective Rating tools help support workers’ compensation underwriters in the following ways:

  • Calculate the basic premium for retrospectively rated policies
  • Allow for flexible user inputs
  • Comply with plan rules and company guidelines
  • Provide built-in documentation 

Large Deductibles

Large Deductible tools provide benchmarks to supplement underwriter judgment and include documentation for the underwriter’s files. Below are some advantages of using this automated solution when developing large deductible workers’ compensation plans:

  • Ability to develop multi-state large deductible premiums
  • Ensure compliance with approved plan rules and company guidelines
  • Availability of built-in documentation

Automation Tools Support Underwriters

Underwriters are essential to risk evaluation. Their experience, discretion and judgment are an important part of the process. These automation tools use data to inform underwriters on the risk and allow them to focus on the aspects of their job that require their expertise. Additionally, they provide a level of control and consistency to workers’ compensation underwriting that offers peace of mind in the event of an audit or other examination.
Workers’ compensation pricing will always remain an important task for underwriters. However, smart automation puts another helpful tool at their disposal.

Perr&Knight’s Automation Tools

During our decades of actuarial consulting for the insurance industry, Perr&Knight’s experts have built workers’ compensation rating tools for the industry with all the features mentioned above.  We have also added custom configurations unique to each program and jurisdiction so that the tool is consistent with approved rules and company guidelines.
In addition to tailoring the tools for each program, our actuarial consulting teams can update the tools to track alongside industry approvals and workers’ compensation metrics. Our experts are also on-hand to add new enhancements as programs change. These updates ensure the tools keep pace with industry experience.
Contact the experienced actuarial support teams at Perr&Knight to discuss how automation can support your workers’ compensation rating process.

Insurers Need to Plan for the Future of Workers’ Compensation Data Reporting

by Chris Curry

The world of workers’ compensation statistical data reporting is constantly evolving. Rating bureaus are continually updating regulatory requirements and increasing the number of reportable data elements.  The past few years have seen multiple rating bureaus roll out brand new data collection and reporting tools, introduce a new Indemnity data call, and increase the number of relational validations between Unit Statistical data and Financial Call data. The need for developing and maintaining adaptable reporting solutions has never been more important than it is today.

Expansion of Reporting and Testing Requirements

A substantial effort has been made by state independent rating bureaus to establish their own internal Policy and Unit Statistical Reporting applications. Historically, paper submissions were an option for Proof of Coverage Reporting. This is no longer the case. Electronic submission uploads or manual data entry are now required by all bureaus. For smaller insurers, manual data entry may be an option, but due to the amount of human intervention, is subject to a sizeable degree of error. Automated electronic data submissions are key to reducing costs associated with error resolution and manual entry.
For a carrier to be approved for electronic reporting by a rating bureau for all required reports, a thorough testing process is required. For WCPOLS, this involves comparing converted text files in bureau formats to hard copy policies to validate the accuracy and completeness of the data reported. DCI, Medical Data Calls, and Indemnity Data Calls all require stringent data validation checks and reconciliation to Unit Statistical Reports. State independent bureaus are increasing the complexity of their required test cases to account for multiple complex policy scenarios. This can be seen most recently with California’s Star systems and Pennsylvania’s expansion of testing requirements. The accuracy of data capture is essential for insurers to avoid fines and remediation.
On top of increased testing requirements, we are seeing the rating bureaus expand data requirements.  The National Council on Compensation Insurance (“NCCI”) and several state independent bureaus implemented the new Indemnity Data Call on 9/30/2020 to collect detailed claims data on indemnity losses. Financial data call relational data validations are expanding on an annual basis and comparisons to other reporting requirements such as Unit Statistical are becoming more prevalent. Data sources need to not only pass initial data validations but must also meet actuarial reasonability standards with increased accuracy. This is especially true for regulator-level premium calculations related to financial calls.

The Importance of Automated Error Correction

Reporting of workers’ compensation statistical data allows very little, if any, room for error. As data elements continue to expand and edit packages become more robust, data scrubbing and error correction will become more time consuming. Companies will be required to spend more money on resources to either improve data capture or invest more in additional resources and people to resolve data quality errors. Alternatively, working with an experienced reporting vendors’ data validation packages will make the reporting process more streamlined, allowing companies to identify data quality errors and make corrections in groups, rather than searching out errors one at a time. Implementation of automated bulk updates will result in a significant number of hours saved on an annual basis.

Single Source Solutions

Over the last few years, rating bureaus have expanded their systems to allow for direct reporting and error correction to be completed through internal web-based applications. In addition, NCCI has expanded their system to allow for the reporting of multiple state independent bureaus. This has improved the overall reporting process by reducing the number of websites utilized for data reporting, but there is still room for improvement. While the Compensation Data Exchange allows for the loading and reporting for both Policy and Unit Statistical data for all states, the application still does not capture all edits for all bureaus.  In the future, insurance companies will be looking for a single platform where data for all bureaus can be loaded, validated, and corrected. Carriers will seek a more simplistic solution – one that limits their employee’s effort and number of clicks required to search multiple websites to ensure they comply with Policy and Unit Statistical reporting requirements.

Summary

As reporting requirements expand and data validations become more robust, staying current on reporting changes is a must in the digitization of data compliance. Being prepared for changes in statistical data reporting is the only true way to avoid countless hours of additional work staying compliant. Perr&Knight continuously works on anticipating trends in data reporting and regulatory compliance. Additionally, Perr&Knight continues to develop new data collection, data validation and error correction applications. Utilizing Perr&Knight will expedite data reporting processes, improve error resolution procedures and offer rapid data comparisons, allowing our clients to focus more of their time on profitability rather than compliance issues.

Stop worrying about missed deadlines and steep fines. Save time, save money and eliminate the hassle of accurate, on-time statistical reporting. Use Perr&Knight’s cutting-edge Statistical Reporting Solution to keep control of all of your statistical reporting needs.

Why Stat Reporting Shouldn’t Be an Afterthought

by Jason Hudson

Authors: Jason Hudson, Principal Director, Statistical Reporting Services, and Mark Nawrath, Principal Director, Account Management
When insurance companies prepare to implement new software for policy and claims administration, regulatory reporting of the data captured is an afterthought. What appear to be turnkey systems often turn out to require more retrofitting and configuration than initially expected to meet statistical reporting requirements, resulting in an increase in investment and a longer timeline to launch.
Here’s why it’s necessary to consider statistical reporting needs throughout the entire development and implementation process.

Powerful and flexible modern systems…they require more configuration

Legacy technology (early mainframe systems) demanded a ton of programming to account for every possible scenario required for policy and claims administration. Building the complex logic required to encode, transform and format data into compliant statistical plan formats was an assumed part of the implementation process.
However, when client server technology started to take off in the 1990s and 2000s, new client-server-based technology vendors decided not to invest in complex logic to comply with statistical reporting mandates. These new products were like warm Jell-O waiting to be molded: they had the ingredients to  perform policy and claims administration processing, but required heavy configuration and customization, not just to write insurance business (that is, all the transaction sets in a business life cycle—endorsement transactions, change renewals, cancellations, etc.), but to conform to the regulatory  mandates for statistical reporting. It was up to insurance companies to make sure they were covered.
In plain terms: many of today’s systems are set up for collecting information, but how they store data on the back end is not designed to meet statistical reporting requirements.

Set yourself up for stat reporting success

In the rush to get new products to market, insurance companies often get caught up in launching their new system (or product or policy) as quickly as possible. Today’s client-server-based systems are not less capable than previous systems, they’re just more malleable. In providing insurance companies with more flexibility, the vendors put the onus on the insurance companies to configure their systems to perform and ensure compliance. Unfortunately, companies tend to focus on business functions (product rating, forms, coverages, claims handling, etc.) and overlook the importance of collecting and formatting specific transaction sets and data points needed to meet regulatory standards. This is why it’s so crucial to consider statistical reporting requirements from the very outset of your new technology implementation. Here are some strategies that work:

  • Involve the right people from the start

Bringing statistical reporting compliance stakeholders to the table late in the game increases the odds of revealing functionality and data needs previously unaccounted in defining implementation specifications. Therefore, it’s important to have statistical reporting subject matter experts work together with experts in rating, underwriting and claims, early in the process to understand what products, coverages and claim events are contemplated and to define the transaction sets and data elements required. 

  • Account for configuration in your budget

Because of the heavy amount of programming required for legacy systems, it was very difficult to ascertain exactly how much was invested in programming for statistical reporting. These days, it’s easier to identify and quantify. Avoid sticker shock on the final project by earmarking a section of the budget for statistical reporting requirements definition, configuration and testing.

  • Clarify your specifications

Identify the statistical file generation processes you’re currently using to inform your needs for your new system. From there, generate a comprehensive list of specifications and make sure they are reviewed by the teams who will be responsible for statistical reporting. Statistical reporting subject matter experts and third-party reporting consultants can come in handy here, as they can make you aware of current industry best practices and other information “you don’t know that you don’t know.”

  • Produce usable test policy data

One part of the transition that is often overlooked is the availability of “production like test data”, essential to ensure completeness in the encoding/transformation process and often required in bureau electronic testing certifications. A number of statistical agents and rating bureaus require you to compare the captured and encoded statistical data (for risks, coverages, policy and claims transactions) to what is being produced on front-end for the insured. That means classifications of business, coverages being offered, rates and premium amounts must be a direct replica on the back end for statistical reporting process. Account for this in your roll-out plan and dedicate appropriate resources for it.

  • Don’t rely on your data warehouse for stat reporting

Data warehouse solutions are typically not architected to satisfy statistical reporting mandates (including rating, premium and claims detail at the line/subline/coverage/transaction level, policy and endorsement form data and onset/offset entries for regular and out of sequence endorsements). Rather than making your data warehouse too complex and robust, let your statistical reporting experts and programmers work with native data that comes from policy and claims administration systems.

Create a comprehensive game plan

Develop a proactive strategy to test how your system will issue policies and transactions once policies become enforced. Don’t make the mistake of testing front-end functionality without an end-to-end review of how those policies and claims get formulated in comparison to the statistical data that you will also be collecting on the back end.
Involving an outside insurance reporting and development consultant to guide you through the process can be especially valuable here. At Perr&Knight, we offer workshops as a part of our Statistical Reporting Solution service offering. These workshops involve all relevant stakeholders and cover key topics that will inform the game plan that guides you forward.
In these multi-day workshops, we discuss with your teams the interlacing of statistical reporting file creation and testing processes into your information technology objectives, the risks associated with delivering an improved statistical reporting capability, and the coordination of your team and third-party participants to schedule projects related to the implementation of an enhanced statistical reporting solution. The final deliverable to you is an evaluation of strengths, potential vulnerabilities, and a plan for moving ahead that includes clear roles and responsibilities, cost projections and duration estimates. Whether you decide to partner with us or not, you end up with impartial strategy for implementation that you can use as a roadmap.
Because statistical reporting is not seen as revenue-generating aspect of the business, it’s often overlooked during technology development. However, doing so only short-changes you on the back end of your project implementation, as teams scramble to retrofit new systems to meet statistical reporting mandates. Instead, keep statistical reporting requirements in mind straight from the start and save yourself the headache of having to go back and make costly corrections – or being fined for non-compliance.

Want to discuss how to make statistical reporting more manageable for your in-house staff? Our insurance technology experts can help.

Compliance Reporting: Complex, Costly and Crucial

by Jason Hudson

Authors: Jason Hudson, Principal & Director, Statistical Reporting & Data Services and Mark Nawrath, PMP, MBA, Principal & Director, Account Management
Statistical reporting requirements are always evolving. This fact won’t change anytime soon. Insurance companies still grumble about regulatory compliance but it’s best to just accept it: compliance reporting is an unavoidable cost of doing business.
Admitted insurance companies in the U.S. are required to send their premium, policy and claims data to a designated statistical agent. If you send incorrect data or your data is not delivered in a timely manner, your company can be fined–or shut down. Yes, it negatively impacts your bottom line. No, it’s not optional. Try to dodge reporting or cut corners and you’ll end up paying for it later in lost time, penalties or costs associated with bringing your reporting system up to date.
Here’s what you need to know about compliance reporting–and how to do it the right way.

Compare apples to apples

When working with legacy systems and forms requirements that vary by state and line of business, it’s a challenge to generate quality data in a usable format. Though it sounds like a simple mapping exercise to match data points and formats, it can actually become a time- and labor-intensive process that still results in data omissions. Since ratings agencies and other regulatory bodies require data that is derived based on their respective reporting requirements, it’s smart to work with an insurance operations consulting firm who can ensure that you’re capturing and reporting the correct information, no matter from which system you are drawing your data.

Begin with the end in mind

Remember: compliance reporting is not optional. You need to establish data capture and reporting processes that meet agent and state requirements and every line of admitted business your company writes. Implement a statistical reporting best practice that addresses the whole picture, even if it means capturing data that you might not appear to “need” right now. The more quality data you capture, the more easily you will be able to meet the conditions of the statistical agents, Departments of Insurance and/or the NAIC, even if they change over time.

Get ahead of the curve

Stay on the front end of developing your stat reporting best practices. Don’t be reactive. Take into account the lead time required to incorporate new codes and new and updated insurance products, while staying on top of the constant influx of data from the products you currently offer. Putting a comprehensive compliance reporting strategy in place frees you from attachment to individual staff members who might retire or otherwise move on, taking your company’s compliance processes with them.

Process experts aren’t necessarily insurance experts

In an industry as heavily regulated as insurance, no error or oversight is ever insignificant. When working with an outside consultant to develop and implement a compliance reporting plan, partner with a consulting firm with specific expertise in insurance. General operations and technology consultants may offer assurances that they can manage insurance compliance, but they lack the in-depth knowledge required to develop a plan that addresses the increasingly complex insurance bureau requirements. Speak candidly with your insurance operations consulting firm before buying a new software system or implementing a new process so they can ascertain the extent of your needs and help you develop a system that addresses all aspects of your reporting. 

Software designed by insurance experts

Managing so many forms of disparate data can quickly overwhelm an insurance company’s internal compliance department. One option is to use statistical reporting software tailored specifically to the needs of insurance companies. We developed the Perr&Knight data model solution for precisely this reason. The software’s powerful insurance-specific algorithms process your company’s data and formats for appropriate reporting to various regulatory bodies.
However, keep in mind that software is no substitute for insurance expertise. We’ve seen insurance companies purchase expensive data management systems that were billed as having the ability to do stat reporting but ultimately can’t deliver. These systems can capture data, but because they were not designed with complex requirements for compliance reporting in mind, they don’t have logic in place that can normalize the data, apply the appropriate rules and ultimately meet bureau specifications.

Stay on top of reporting by going “over the fence”

At Perr&Knight, another option is available: we can handle statistical reporting for you, using what we call the “over the fence method.” We ask our clients to simply toss all their data, in its various formats, “over the fence” to us. We then create and execute a series of processes to combine data sets, resulting in a clean format that matches the requirements of various regulatory bodies.
For a mandatory practice, regulatory compliance is remarkably complicated to manage. Mistakes are costly and most in-house compliance departments have a hard time keeping up. Implement a well-thought-out process and you’ll put your company in the best position to maintain compliance, no matter the requirements, and to be best prepared when changes arise.

For questions about how to streamline or update your company’s statistical reporting, contact Perr&Knight at (888) 201-5123 x3.