GVHR » Topics » Workers Compensation Costs

These excerpts taken from the GVHR 10-K filed Mar 16, 2009.

Workers’ Compensation Costs

 

 The Company has maintained a loss sensitive workers’ compensation program since January 1, 2000. The program was with CNA Financial Corporation, (“CNA”) until December 31, 2002 and is with member insurance companies of American International Group, Inc. (“AIG”) under AIG’s Commercial Insurance Group (“AIG CI”) effective January 1, 2003. These programs provide insurance coverage for claims incurred in each plan year but which will be paid out over future periods. In states where private insurance is not permitted, client employees are covered by state insurance funds.

 

Workers’ compensation expense for the year is based upon premiums paid to the carrier for claims in excess of the deductible layer, administrative costs of the programs (including claims administration, state taxes and surcharges), the estimate of the total cost of the claims that fall within the policy deductible layer (calculated on a net present value basis), and is reduced by the return on investment with respect to the collateral held by AIG under the insurance agreements.

 

The Company reviews the estimated cost of claims in the deductible layer on a quarterly basis.  The determination of the estimated cost of claims is based upon a number of factors, including but not limited to actuarial calculations, current and historical loss trends, the number of open claims, developments relating to the actual claims incurred, and the impact of acquisitions, if any.  A significant amount of judgment is used in this estimation process.

 

Workers’
Compensation Costs



 



 The Company has
maintained a loss sensitive workers’ compensation program since January 1,
2000. The program was with CNA Financial Corporation, (“CNA”) until December 31,
2002 and is with member insurance companies of American International Group, Inc.
(“AIG”) under AIG’s Commercial Insurance Group (“AIG CI”) effective January 1,
2003. These programs provide insurance coverage for claims incurred in each
plan year but which will be paid out over future periods. In states where
private insurance is not permitted, client employees are covered by state
insurance funds.



 



Workers’ compensation expense for the year is based
upon premiums paid to the carrier for claims in excess of the deductible layer,
administrative costs of the programs (including claims administration, state
taxes and surcharges), the estimate of the total cost of the claims that fall
within the policy deductible layer (calculated on a net present value basis),
and is reduced by the return on investment with respect to the collateral held
by AIG under the insurance agreements.



 



The Company reviews the estimated cost of claims in
the deductible layer on a quarterly basis. 
The determination of the estimated cost of claims is based upon a number
of factors, including but not limited to actuarial calculations, current and
historical loss trends, the number of open claims, developments relating to the
actual claims incurred, and the impact of acquisitions, if any.  A significant amount of judgment is used in
this estimation process.



 



Workers’
Compensation Costs



 



 The Company has
maintained a loss sensitive workers’ compensation program since January 1,
2000. The program was with CNA Financial Corporation, (“CNA”) until December 31,
2002 and is with member insurance companies of American International Group, Inc.
(“AIG”) under AIG’s Commercial Insurance Group (“AIG CI”) effective January 1,
2003. These programs provide insurance coverage for claims incurred in each
plan year but which will be paid out over future periods. In states where
private insurance is not permitted, client employees are covered by state
insurance funds.



 



Workers’ compensation expense for the year is based
upon premiums paid to the carrier for claims in excess of the deductible layer,
administrative costs of the programs (including claims administration, state
taxes and surcharges), the estimate of the total cost of the claims that fall
within the policy deductible layer (calculated on a net present value basis),
and is reduced by the return on investment with respect to the collateral held
by AIG under the insurance agreements.



 



The Company reviews the estimated cost of claims in
the deductible layer on a quarterly basis. 
The determination of the estimated cost of claims is based upon a number
of factors, including but not limited to actuarial calculations, current and
historical loss trends, the number of open claims, developments relating to the
actual claims incurred, and the impact of acquisitions, if any.  A significant amount of judgment is used in
this estimation process.



 



EXCERPTS ON THIS PAGE:

10-K (3 sections)
Mar 16, 2009

"Workers Compensation Costs" elsewhere:

Westaff (WSTF)
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