Reporting unit statistical loss corrections is a common source of questions for data reporters.

Unit statistical report (USR) data must be reported to the WCIRB for every workers’ compensation insurance policy that extends coverage under the workers’ compensation laws of California, including California coverage by endorsement on a policy primarily covering another state.

The first reporting of a given policy includes losses valued as of 18 months after the policy inception month, with each subsequent reporting (up to 10 reports) valued every 12 months thereafter (with the tenth reporting valued as of 126 months after the policy inception month). 

Between report levels, USR corrections are not generally expected, but there are a few exceptions. As specified in the California Workers’ Compensation Uniform Statistical Reporting Plan—1995 (USRP), there are certain conditions, listed below, under which loss corrections must be reported. If these conditions are not met, a correction should not be reported and, instead, the next reporting should occur with the normal valuation of losses on a subsequent report level. 

Loss correction reports are required under these conditions:

1. When a claim becomes a non-compensable, subrogated, joint coverage, partially fraudulent or a Compromised Death claim – see definitions of each in the USRP. 

2. When any loss record detail was incorrectly reported through mistake other than error of judgment  An “error of judgment” refers to a field value change due to the normal development of the claim over time; this type of change should be reported on the next report level and not as a correction to a previously submitted report level USR. By contrast, a “mistake other than error of judgment,” which refers to a reporting error on a loss field, requires a correction.

3. Exposure has been reassigned to another standard classification through the revision of an audit.  A loss correction should be filed with the exposure correction, reassigning all claims that were previously reported under the incorrect standard classification to the appropriate standard classification.

4. A correction is made in a standard classification assignment of a given claim, or a group of claims, as a result of a WCIRB test audit of a policyholder for which experience has been submitted.

5. A clerical error in the standard classification assignment of a given claim, or a group of claims, has been discovered by the insurer or by the WCIRB.  If an apparent error is discovered by the WCIRB, the insurer must either correct the error or provide a satisfactory explanation for why the classification assignment is correct.

6. A clerical error in the type of injury assignment of a given claim, or a group of claims, has been discovered by the insurer or by the WCIRB. If an apparent error is discovered by the WCIRB, the insurer must either correct the error or provide a satisfactory explanation for why the type of injury assignment is correct.

When a loss correction is required, which report levels need to be corrected?
Loss corrections are made to the current report level only. Loss corrections resulting from condition #1 above should be made to the report level reflecting the time the claim becomes a non-compensable, subrogated, joint coverage, partially fraudulent or Compromised Death claim.  Once a claim becomes a non-compensable, subrogated, joint coverage, partially fraudulent or a Compromised Death claim in accordance with the definitions in the USRP, this condition is not expected to change for this claim in subsequent report levels.

What happens when a loss correction is required, but the correction coincides with the normal valuation of losses?
In general, when a loss correction coincides with the normal valuation of losses, a correction is not necessary.  Instead, the change is reported on the next report level. 

Exception:  For a claim where the employer notified its insurer in writing that the claim is non-compensable pursuant to California Labor Code Section 3761 and the claim is determined to be non-compensable by the Workers’ Compensation Appeals Board, a loss correction shall be reported within ninety (90) days after final adjudication of the determination of non-compensability.

For More Information

California Workers’ Compensation Uniform Statistical Reporting Plan—1995 - See Part 4, Unit Statistical Reporting Requirements, Section VII, Subsequent Reports, Correction Reports, and Reporting Methods, Rule 2, Correction Reports
WCIRB Bulletin 2014-01 - Non-Compensable Claims
WCIRB Data Reporting Handbook - Unit Statistical Reporting

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