Philosophy of Reserving Claims

RMS actively serves public entity clients throughout California in the role of claims administrator and claims adjuster. We handle a variety of cases, such as Civil Rights, Employment, Dangerous Conditions, Motor Vehicle Accidents and Personal Injury.

Because of this active claims handling we have insight into case values based on a variety of experience factors:

  • Venue
  • Plaintiff Counsel
  • Similar case resolution values
  • Political atmosphere

Additionally, we evaluate the liability factors in the case. These include immunities available to the public entity, factors of the incident, investigative results, case strength v. weaknesses, sympathy value, risk transfer and witness capabilities.

The other important factor in reserving is the damage factors, such as past/future medicals, loss of earnings, potential for a Plaintiff Attorney fee award, property damage, future supportive care, severity of bodily injury.

We realize that reserving is an art not a science; however we strive to quantify the experience, liability and damages factors into a formula that will allow us to come up with the most accurate analysis of the ultimate case value.

In an audit we try to establish in the file through the investigation what the immediate liability factors are. In the course of the claims handling we look at the ongoing liability and damage analysis done by both the claims handler and defense counsel. Some key areas we focus on are expert reviews/opinions, deposition summaries, independent medical examinations, economist reports, structured annuity ratings and other issues impacting the claim.

Once we have reviewed the file and the liability + damage + experience factors, we can then evaluate the current reserve as appropriate or may make a recommendation for a reserve adjustment.

On the expense/legal side of reserving the file should be a road map as to what future claims handling and/or legal expenses will occur in the future.

Additionally our experience factor also assists in evaluating the adequacy of the posted expense/legal services.

Issues such as dispositive motions, potential for trial, expert costs, depositions and appeal potential are evaluated as they relate to the expense/legal costs involved in the claim, to determine if the reserve is appropriate or a reserve adjustment is in order.

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