Rules & Legislation Committee
March 30, 2023

1 CITY OF OAKLAND

WORKERS’ COMPENSATION
ANNUAL REPORT FY 2021-22

Human Resources Management, Risk Division
150 Frank H. Ogawa Plaza, Suite 3332, Oakland, CA 94612 Phone: 510-238-7660

2 TABLE OF CONTENTS
Citywide Overview 3

Third Party Claims Administrator 5

Initiatives 9

Year-over-Year Comparisons 11

Claim Management Programs 15

Return to Work Statistics 16

Program Expenditure Categories 18

Claims by Department 21

Police Department 22

Fire Department 24

Public Works 26

Office of Parks and Recreation 28

All Other Departments 30

Schedule of Exhibits 31
Oakland’s Workers’ Compensation program
falls under the City’s Human Resources
Management Department. The program
resides in the Risk Division, is managed by
the Manager of Risk and Benefits, and is
administered by a contracted third party.

This report summarizes Oakland’s Workers’
Compensation Program for Fiscal Year 2021-

22. It presents key program metrics along
with comparisons between departments and
previous years.

CITY OF OAKLAND
HR Management Department, Risk Division
150 Frank H. Ogawa Plaza, 3rd Floor
Oakland, CA 94612, (510) 238-7660

IAN APPLEYARD
DIRECTOR: HUMAN RESOURCES

MANAGEMENT

ANDREW LATHROP

MANAGER RISK AND BENEFITS

Integrated Disability Management

Mary Baptiste (510) 238-2270
Donella Williams (510) 238-6488

Safety / Loss Control

Greg Elliott (510) 238-4993
Lana Chan (510) 238-7971

Risk Administration

Michael Bailey (510) 986-2898
Erika Turner (510) 238-7660
WORKERS’ COMPENSATION PROGRAM ANNUAL REPORT FISCAL YEAR 2021-22

3 CITYWIDE OVERVIEW ANNUAL REPORT FISCAL YEAR 2021-22 Prior Claims (July 2, 1971—Jun 30, 2021): 1010 New Claims during 21-22: 1 0 7 1
C l a i m s r e o p e n e d / r e c l a s s i f i e d 8 8 Claims closed during 21-22: (1005)
Total Open Claims as of June 30, 2022: 1164 Total Expenses for 21-22 $25,633,796
Est. Outstanding Losses @ 50% Conf. as of June 30, 2022 (AON) $69,530,774 Est. Outstanding Losses (PDV) $61,678,900

2021/22 Final EWC Premium $2,677,613

TPA Annual Performance Audit (JT2) 91.65%

4 Total Operational Expenses + Admin Ex p e n s e = $25,633,796

TOTAL COST SUMMARY ANNUAL REPORT FISCAL YEAR 2021-22 The total cost of the Workers’ Compensation Program for Fiscal Year 2021-22:

Settlements:

Permanent Disability:

$3,722,094
Medical

WC Disability Medical
First Aid Only Claims

Total Medical:

$7,418,063
$6,020

$7,424,083
Temporary Disability

Non-4850
Temporary Disability
MOU Benefit (non-sworn)

Total Non-4850 Pay

4850
Oakland Police Dept.

Oakland Fire Dept.

Total 4850 Pay

Subtotal—Temp. Disability

Total Disability
Payments:

$1,315,488
$324,045

$1,639,534

$3,609,925
$5,734,673
$9,344,598

$10,984,132

$14,706,226
Operational Expenses
Sub-total

Contributions— Excess Ins.

Total Operational
Expenses:

$23,817,453

($829,132)

$22,988,320
Other Claim Cost

Rehabilitation
Investigation Expenses
Legal

ADR (OPOA)
Utilization Review
Return to Work Services
Injury Report Line
10% Penalties

Other Claim Cost Total:

$71,326
$86,726
$827,585
$107,521
$347,825
$183,758
$58,400
$4,003

$1,687,143
Administration Expenses
TPA Contract
Bill Review
Misc. Fees

Total Administration
Expenses:

$2,024,174
$594,616
$26,686

$2,645,476
5 Exhibit 5-A
The purpose of a Third Party Administrator (TPA) is to manage the City’s workers’ compensation program by complying with the requirements of the California Division of Industrial Relations (DIR) and Division of Workers’ Compensation (DWC).

The success of the City’s Self-Insured Workers’ Compensation program relies heavily on a successful partnership with the City’s TPA. Since 2001, the City has partnered with JT2 Integrated Resources. JT2’s performance has been measured by regular audit, against a performance standard established by PRISM.

The City has instituted a number of different analytical tools to assess the performance of the TPA, including annual Claims Audits, annual Actuarial Reviews, quarterly Financial Reviews, quarterly Fraud Status Updates, and intermittent miscellaneous reviews, such as Fraud Program review and Contract Compliance Assessments. In the past year, the City commissioned a number of these tools, including Actuarial Assessment, Fraud Assessment, and a Claims Audit. The results of these assessment efforts are found in the included Appendices. The overall score for claims audits over time follows below.

THIRD PARTY ADMINISTRATOR ANNUAL REPORT FISCAL YEAR 2021-22

6 Exhibit 6-A
CLAIMS AUDIT SUMMARY ANNUAL REPORT FISCAL YEAR 2021-22 Performance Strengths
Outstanding results in were achieved in the categories of adjuster caseload, initial reserves for probable value, medical bills paid timely, apportionment ruled in/out, apportionment pursued appropriately, proactive return to work, TD/4850 reserves separate, settlement valuations, member settlement authority requested, periodic contact with third party, subrogation pursued for max recovery, approval to accept/waive/settle subrogation, and timely excess reimbursement requests.

Performance Improvement Recommendations
Upon notice of a surgery approval, we recommend that a diary be set 1-2 business days after the procedure to contact the employee within three business days. The earlier diary date will assist with accommodating any unplanned delays in getting the contact done. When the employee is off work, we recommend a separate 25-day diary for ongoing contact to ensure the 30-day standard is met.

There needs to be continued focus on timely and appropriately adjusting of the reserves based upon new information, as well as at each diary review for the plan of action update.

Additionally, OSIP compliant reserve reviews must be completed annually.

There was a theme of cases being worked up for settlement well beyond the standard to pursue resolution within 10 working days of receipt of information that would allow the claim to be finalized. Upon receipt of information that would allow the claim to be finalized we recommend a diary be set to ensure that resolution is pursued within 10 days with timely follow up efforts demonstrated until settlement or closure is achieved.

When potential subrogation is identified, we recommend a diary be set to ensure compliance with all timeframes for notification and follow up.
7 In addition to the Claims Management Audits, other data is collected to monitor claims administration performance. Two examples are Closing Ratio and Fraud Investigation.

Claims Productivity Ratio
by Fiscal Year
Fiscal Year # Claims
Closed
# Claims
Opened
Closing
Ratio
FY16-17 634 569 111%
FY17-18 636 515 123%
FY18-19 796 552 144%
FY19-20 700 511 137%
FY20-21 732 762 96%*
FY21-22 1005 1388 72%
Exhibit 7-A
Fraud Investigations have 3 parts:

1. Surveillance (observation of individual without contact with the subject).

2. Field Investigations (progression of su rveillance, and taking statements from the subject & others).

3. Fraud Referral (the case meets the standard for fraud set by the District Attorney).

Indemnity
Claims Filed
FY2019-20
Service
Referrals
Surveillance Fraud Referral
(FD-1) Submission
Background
Checks
Denied
Claims
997 121 4 0 36 100
Exhibit 7-B
TPA—PERFORMANCE MEASURES ANNUAL REPORT FISCAL YEAR 2021-22 Closing Ratio: The ratio of claims closed over claims opened during a specific period of time.

A Closing Ratio value of greater than one is desirable because it indicates that more claims are being closed than opened, reducing the City’s total number of open claims.

Fraud Investigation Activity
*Beginning in FY 20-21 the # of opened claims includes claims that were reopened or reclassified.
8 An Agreed Medical Examination (AME) is a tool approved by the State of California as a method of seeking third opinion resolutions on disputed medical cases. This typically occurs when an employee’s treating physician and the employer’s physician disagree on the severity of injury and degree of disability caused by the injury. When such disagreement exists, either party (employee or employer) has the option to invoke an AME. However, both parties must agree to the need for the exam. Additionally, the State of California requires that the injured worker have legal representation to qualify for an AME. If the employee does not have legal counsel, the City cannot require the employee to participate in the AME process.

The physician selection process is managed by the State of California. When a request for an QME is received, the State provides a “panel list” of physicians to the parties from which to select. The State of California establishes the panel. Typically it takes several months for an Examination appointment due to the number of State-wide Workers’ Compensation cases that are in dispute.

The City of Oakland relies heavily on AMEs to bring resolution to Workers’ Compensation cases. The exhibit below illustrates the number of AME and Qualified Medical Examination processes utilized for the current Fiscal Year and for the four previous Fiscal Years. In addition, this exhibit reflects the number of cases settled on the basis of the opinion of the employee’s Primary Treating Physician (PTP).

Fiscal Year FY17-18 FY18-19 FY19-20 FY20-21 FY21-22
Number of Claims Settled 182 89 162 129 124
Agreed Medical Examiner 121 37 79 70 37
PTP (Primary Treating Physician) 24 12 25 26 57
Panel QME (Employee Unrepresented
by Attorney) 0 0 0 2 22
QME (Employee Represented by
Attorney) 37 39 54 31 8
Other 0 1 5 0 0
Medical Legal Statistics by Fiscal Year Exhibit 8-A
AGREED MEDICAL EXAMINATIONS ANNUAL REPORT FISCAL YEAR 2021-22

9 INITIATIVES ANNUAL REPORT FISCAL YEAR 2021-22 Ongoing

 Monthly disability review meetings with department representatives to discuss active claims and identify cases for investigation and/or transitional duty assignments.  Telephonic injury reporting to triage Workers’ Compensation claims reporting.  Participation in Medical Provider Network (MPN) through WellComp, a MPN sponsored by PRIMS (formally CSAC-EIA).
 Ongoing examination of City’s disability programs
 Continuing education

New Initiatives

 Oakland Police Officer Association - Alternative Dispute Resolution Carve-Out  Approved by the DIR on December 9, 2019
 First Audit completed on April 11, 2022

 Maintain shift in settlement philosophy
 Intended to address future liabilities
 Working closely with Finance to balance annual cost vs. outstanding loss

 Continual reevaluation of workflow and processing due to COVID-19 claims.

 RFP issued for TPA services in December 2022. Ongoing, but negatively effected by the 2023 cyberattack.

10 As a form of Risk Transfer, the City purchases Excess Workers' Compensation (EWC) coverage through PRISM. The EWC Program provides bodily injury coverage for employees if they are injured on the job. Coverage includes reimbursement for payments above the City’s Self Insured Retention of $750,000. Covered expenses include compensation for loss of earnings at statutory rates, medical benefits, and some allocated expenses.

The EWC Program provides the following special coverage features:
 Volunteers included (subject to resolution by employer prior to injury)  Defense costs included within SIR and limit
 No terrorism exclusion
 Other states coverage (while in course and scope)
 EIA staff will coordinate a claims audit every 2 years  183 Members covering $34B in total payroll.

2021/22 Final EWC Premium: $2,677,613

EWC Insurance Retention Review
Each year the City reviews it’s EWC coverage and other possible placements before renewing with PRISM. As in previous years, PRISM continues to be the City’s most cost efficient partner.

A memorandum dated February 14, 2023 which discusses the workers’ compensation excess insurance market is included in the appendices.

EXCESS W/C INSURANCE ANNUAL REPORT FISCAL YEAR 2021-22

11 COO Self-Insured Annual Report to State of California Fiscal Year FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY21-22 Indemnity Claims Rec’d 233 191 218 351 757
Medical Only Claims Rec’d 191 242 222 218 240
Total # of Claims Rec’d 424 433 440 569 997
Total Benefits Paid
(Disability & Medical Ex-
penses Only)
$14,697,608 $18,300,670 $17,952,696 $16,399,725 $22,149,714 Total Future Liability $48,486,464 $65,332,189 $55,020,690 $54,083,071 $49,309,192 # of Employee (FTE) 5283 5031 4701 5062 5062
Total Reported Payroll $375,381,194 $400,535,932 $419,087,238 $436,153,371 $480,601,252 Total # Claims/100 FTE 8.03 8.63 9.36 11.24 19.7
Total Benefits Paid/100
FTE $278,206 $363,758 $381,891 $323,977 $437,568
Total # Claims per $1M
Payroll 1.13 1.08 1.05 1.30 2.07
Total Benefits Paid per
$1M Payroll $39,154 $45,690 $42,838 $37,601 $46,088
Average Cost per Claim $34,664 $37,856 $40,801 $28,822* $22,216* As a Self-Insured employer, the City is required to submit a Self-Insured Annual Report (SIA) to the State of California each year. The SIA serves two purposes. First, it enables the State to determine the annual Workers’ Compensation Assessments to employers. Second, it provides the City comparison information for year to year program performance. The table below shows the City’s performance for the past five fiscal years and the following pages compare City’s Workers’ Compensation experience against itself.

Exhibit 11-A
COMPARISONS OVER TIME ANNUAL REPORT FISCAL YEAR 2021-22 *Average cost per claim was driven down due to a high occurrence of low-cost COVID-19 claims. 12 Exhibit 12-A
Exhibit 12-B

OAKLAND TRENDS ANNUAL REPORT FISCAL YEAR 2021-22
COVID-19 claims continue to dominate the reports. Because most COVID-19 claims have low to no cost, cost per claim were significantly lower in COVID years than in years without significant COVID-19 claims.

13 Exhibit 13-A
Exhibit 13-B
OAKLAND TRENDS CONT. ANNUAL REPORT FISCAL YEAR 2021-22

14 Exhibit 14-B
Exhibit 14-A
CLAIMS MANAGEMENT PROGRAM ANNUAL REPORT FISCAL YEAR 2021-22 Although disability and medical payments increased over prior years, estimated future liabilities for all open claims decreased significantly.

15 Exhibit 15-B
Exhibit 15-A
CLAIMS MANAGEMENT PROGRAM ANNUAL REPORT FISCAL YEAR 2021-22

16 Exhibit 16-A
Exhibit 16-B
RETURN TO WORK ANNUAL REPORT FISCAL YEAR 2021-22

17 The number of Transitional Duty (TD) increased somewhat from the previous fiscal year.

The rather modest increase is not directly correlated with the increase in claims frequency due to the relative difficulty of providing modified duty for COVID-19 claims.

Factors to consider:
 Medical Providers releasing more employees to Modified Duty than the previous year.  Entities learning to operate more efficiently in a post COVID-19 regime.  Both the City and third party administration adjusting to remote work.

Exhibit 17-A
TRANSITIONAL DUTY BY DEPT. ANNUAL REPORT FISCAL YEAR 2021-22

18 Exhibit 18-B
Exhibit 18-C
PROGRAM EXPENDITURES ANNUAL REPORT FISCAL YEAR 2021-22 The primary expenditures in Oakland’s WC Program are Indemnity Payments (Permanent Disability payments), Temporary Disability payments, and Medical Expenditures. Appendix A defines these terms and Appendix B provides a detailed breakdown of program expenditures over the past 5 years. The following graphs show five-year histories for each primary expenditure type.

Exhibit 18-A

19 Exhibit 19-A
Exhibit 19-B
PROGRAM EXPENDITURES CONT. ANNUAL REPORT FISCAL YEAR 2021-22

20 Exhibit 20-B
Exhibit 20-A
PROGRAM EXPENDITURES CONT. ANNUAL REPORT FISCAL YEAR 2021-22

21 Exhibit 21-A
Exhibit 21-B
CLAIMS BY DEPARTMENT ANNUAL REPORT FISCAL YEAR 2021-22

22 Exhibit 22-A
CLAIMS—OPD ANNUAL REPORT FISCAL YEAR 2021-22
Exhibit 22-D
Exhibit 22-B
Exhibit 22-C

23 CLAIMS—OPD INJURY TYPES ANNUAL REPORT FISCAL YEAR 2021-22 Exhibit 23-C
Exhibit 23-B
Exhibit 23-A
24 Exhibit 24-B

Exhibit 24–A
Exhibit 24-C
CLAIMS—OFD ANNUAL REPORT FISCAL YEAR 2021-22
Exhibit 24-D

25 Exhibit 25-B
Exhibit 25-A
Exhibit 25-C
CLAIMS—OFD INJURY TYPES ANNUAL REPORT FISCAL YEAR 2021-22

26 Exhibit 26-A
Exhibit 26-D
Exhibit 26-B
Exhibit 26-C
CLAIMS—PU BLIC WORKS ANNUAL REPORT FISCAL YEAR 2021-22

27 Exhibit 27-A
Exhibit 27-C
Exhibit 27-B
CLAIMS—OPW INJURY TYPES ANNUAL REPORT FISCAL YEAR 2021-22

28 Exhibit 28-A
Exhibit 28-B
Exhibit 28-D
Exhibit 28-C
CLAIMS—PARKS AND RECREATION ANNUAL REPORT FISCAL YEAR 2021-22

29 Exhibit 29-A
Exhibit 29-B
Exhibit 29-C
INJURY TYPES—PARKS AND REC. ANNUAL REPORT FISCAL YEAR 2021-22 30 Exhibit 30-A
Exhibit 30-B
Exhibit 30-D

Exhibit 30-C
CLAIMS—OTHER DEPARTMENTS ANNUAL REPORT FISCAL YEAR 2021-22

31 SCHEDULE OF EXHI BITS
Appendix A Key Terms
Appendix B Workers’ Compensation Expenditure Report
(FY 2018-19 through FY 2021-22)
Appendix C Workers’ Compensation Claims Audit, Final
Reports
December 2022
Appendix D Actuarial Review of the Self-Insured Workers’ Compensation Program
AON Risk Solutions, June 30, 2022
Appendix E Workers’ Compensation Market Update
PRISM, February 14, 2023
A P P E N D I C E S ANNUAL REPORT FISCAL YEAR 2021-22 32 Appendix A

Key Terms
33 K

EY TERMS
Permanent Disability
Settlements:

Settlements paid when an injury results in a permanent
disability.

Temporary Disability: Non-Sworn Salary Supplement: City payments at the em- ployee’s full rate of pay made in the first 60-90 days when injured workers are unable to perform work of any kind.

Temporary Disability: State-mandated payments made
when injured workers are unable to perform work of any
kind.

Sworn Salary Supplement/4850: State-mandated pay-
ments at the employee’s full rate of pay for up to one-year when an injured worker is unable to perform work of any kind.

Allocated:
(Other Claim Costs)
· Rehabilitation
· Investigation Expenses
· Legal
· Utilization Review
· Return to Work Services
· 24 hour Injury Report Line
· 10% Penalties
Medical: All medical expenses related to treatment of the injury, in- cluding diagnostics, physical therapy, durable medical equip- ment, prescriptions and surgery, and in/out hospital patient care.

Administrative:

This includes costs associated with administration of the Workers’ Compensation Program.
34 Appendix B

Workers’ Compensation Expenditures Report
(Fiscal Years 18/19—21/22)
35 36
Appendix C
Claims Audit Report
December 2022

DECEMBER 2022

AUDIT REPORT

CITY OF OAKLAND
Third Party Administrator – JT2

1 Table of Contents

Executive Summary .............................................. 2

Audit Scoresheets ............................................... 4

Audited But Not Scored Results ........................... 21

Addendum I – POA, S/R and Excess Detail Results
Addendum II – Audit Cross Reference List
Addendum III – Audit Worksheets

2 EXECUTIVE SUMMARY
This section will serve as an overview of the audit findings with recommendations for moving forward.

The overall claims handling of the TPA is Exceeds Expectations as measured in accordance with the standards set forth in the Guidelines.

Performance Strengths
Outstanding results in were achieved in the categories of adjuster caseload, initial reserves for probable value, medical bills paid timely, apportionment ruled in/out, apportionment pursued appropriately, proactive return to work, TD/4850 reserves separate, settlement valuations, member settlement authority requested, periodic contact with third party, subrogation pursued for max recovery, approval to accept/waive/settle subrogation, and timely excess reimbursement requests.

Performance Improvement Recommendations
Upon notice of a surgery approval, we recommend that a diary be set 1-2 business days after the procedure to contact the employee within three business days. The earlier diary date will assist with accommodating any unplanned delays in getting the contact done. When the employee is off work, we recommend a separate 25-day diary for ongoing contact to ensure the 30-day standard is met.

There needs to be continued focus on timely and appropriately adjusting of the reserves based upon new information, as well as at each diary review for the plan of action update. Additionally, OSIP compliant reserve reviews must be completed annually.

There was a theme of cases being worked up for settlement well beyond the standard to pursue resolution within 10 working days of receipt of information that would allow the claim to be finalized.

Upon receipt of information that would allow the claim to be finalized we recommend a diary be set to ensure that resolution is pursued within 10 days with timely follow up efforts demonstrated until settlement or closure is achieved.

When potential subrogation is identified, we recommend a diary be set to ensure compliance with all timeframes for notification and follow up.

There was one file with untimely initial excess reporting which created a low score. There were also five files affecting the subsequent excess reporting score where the ongoing excess reporting diary fell off track. Given the low number of exceptions in these categories we do not consider this to be an adverse handling trend.

Audit Demographics
The audit criterion was formed by using the PRISM Claims Administration standards. The file audits specifically focused on claims handling activity from 12/01/21 through the date of the audit. JT2 provided a list of the open inventory covered by the PRISM program and a random selection of the files was pulled to gather 152 files from the open inventory. The file selection consisted of a mix of indemnity claims, future medical files, and medical only claims. File documents, notes, payments, letters, and reserves are maintained in electronic form. The files were accessed remotely. Each worksheet was provided to Carmen Angeles and Angela Sorrentino for review and comment. They engaged with the auditors and submitted all questions, feedback, or disputes prior to the conclusion of the audit.

3 AUDIT TEAM
Angela Mudge
Owner, President & CEO
Over 30 years of workers' compensation claims experience. IEA Certificate, Self-Insured Certificate & WCCP Designation. Prior positions held - adjuster, supervisor, claims manager and vice president.

Tera Martin Del Campo
Vice President Operations
Over 20 years of workers' compensation claims experience. IEA Certificate, Self-Insured Certificate and WCCA Designation. Prior positions held – adjuster and claim compliance analyst

Mayra Reyes
Collaborator
Over 20 years of workers' compensation claims experience. Self-Insured Certificate. Prior positions held – adjuster.

4 AUDIT SCORESHEETS

Overview

Category Points Available Points Score % Prior Score Variance Claim Handling - Administrative 1725 1613 Exceeds Expectations 93.51% 95.69% -2.19% Caseload 1 1 Exceeds Expectations 100.00% 100.00% 0.00% Case Revi ew and Documentati on 1486 1395 Exceeds Expectations 93.88% 96.27% -2.39% Communi cati on 12 5 Unsatisfactory 41.67% 77.78% -36.11% Fiscal Handling 50 43 Meets Expectations 86.00% 85.48% 0.52% Claim Cre ation 84 80 Exceeds Expectations 95.24% 98.18% -2.94% Reserves 92 89 Exceeds Expectations 96.74% 96.43% 0.31% Claims Handling - Technical 705 614 Meets Expectations 87.09% 90.50% -3.41% Payments 108 108 Exceeds Expectations 100.00% 98.82% 1.18% Apportionment 58 58 Exceeds Expectations 100.00% 87.10% 12.90% Disability Manage m e nt 23 22 Exceeds Expectations 95.65% 88.89% N/A Reservi ng 367 304 Meets Expectations 82.83% 89.46% -6.62% Re solution of Claim 63 48 Below Expectations 76.19% 82.35% -6.16% Settlement Authority 26 26 Exceeds Expectations 100.00% 100.00% 0.00% Li ti gated Cases 32 28 Meets Expectations 87.50% 97.14% -9.64% Subrogation 6 4 Unsatisfactory 66.67% 66.67% 0.00%
Excess Coverage 22 16 Below Expectations 72.73% 77.78% N/A Overall Score 2430 2227 Exceeds Expectations 91.65% 94.09% -2.45% 5 Detail

Category Points Available Points Score % Prior Score Variance Claim Handling - Administrative
Caseload
Adjuster Casel oad 1 1 Exceeds Expectations 100.00% 100.00% 0.00% Case Review and Documentation
Exam ine r Re vie ws - Tim ing 9 44 917 Exceeds Expectations 97.14% 98.34% -1.20% Exam ine r Re vie ws - Quality Plan of A ction 152 112 Below Expectations 73.68% 91.74% -18.05% Supervi sor Revi ews 386 363 Exceeds Expectations 94.04% 93.26% 0.78% Me dical Only Conve rsion 4 3 Below Expectations 75.00% 100.00% -25.00% Communication
Ongoing Employee Contact 12 5 Unsatisfactory 41.67% 77.78% -36.11% Fiscal Handling
Payments on Correct Cl ai ms 12 11 Exceeds Expectations 91.67% 96.43% -4.76% File Balancing 38 32 Meets Expectations 84.21% 76.47% 7.74% Claim Creation
Three Point Contact - Initial Employee Contact 39 38 Exceeds Expectations 97.44% 96.30% 1.14% Three Point Contact - Initial Employer Contact 45 42 Exceeds Expectations 93.33% 100.00% -6.67% Reserves
Initial Re se rve s for Probable Value 46 46 Exceeds Expectations 100.00% 96.43% 3.57% Initial Re se rve s Tim e ly 46 43 Exceeds Expectations 93.48% 96.43% -2.95% Score for Claim Handling - Administrative 1725 1613 93.51% 95.69% 6 Category Points Available Points Score % % Variance
Claim Handling - Technical
Payments
Me dical Bills Paid Tim e ly 108 108 Exceeds Expectations 100.00% 98.81% 1.19% Penal ti es Coded Correctl y 0 0 N/A N/A 100.00% N/A
Apportionment
Apportionment Ruled In/Out 36 36 Exceeds Expectations 100.00% 87.50% 12.50% Apportionment Pursued Appropriately 22 22 Exceeds Expectations 100.00% 86.67% 13.33% Disability Management
Proacti ve RTW 18 18 Exceeds Expectations 100.00% 87.50% 12.50% Member Noti ced of Perm. Restri cti ons 5 4 Meets Expectations 80.00% 100.00% -20.00% Reserving
Reserves Adjusted Ti mel y 148 117 Below Expectations 79.05% 84.30% -5.24% TD & 4850 Reserves Separate 33 33 Exceeds Expectations 100.00% 100.00% 0.00% PD Exposure Includes Life Pension 4 3 Below Expectations 75.00% 100.00% -25.00% FM Reserve Consi stent wi th OSIP 34 15 Unsatisfactory 44.12% 94.12% -50.00% Al l ocated Reserves Accurate 148 136 Exceeds Expectations 91.89% 91.60% 0.30% Resolution of Claim
Resolution Pursued Timely 37 22 Unsatisfactory 59.46% 68.42% -8.96% Settlement Valuation 26 26 Exceeds Expectations 100.00% 100.00% 0.00% Medi care's Interests Protected 0 0 N/A N/A 100.00% N/A Settlement Authority
EIA Settlement Authority Requested 0 0 N/A N/A 100.00% N/A Member Settl ement Authori ty Requested 26 26 Exceeds Expectations 100.00% 100.00% 0.00% Litigated Cases
Initiate Investigation Material to Potential Lit. 0 0 Exceeds Expectations N/A N/A N/A Li ti gati on Management & Defense Attorney on Panel 32 28 Meets Expectations 87.50% 97.14% -9.64% Subrogation
Identify and Notice 3rd Party Timely 3 1 Unsatisfactory 33.33% 50.00% -16.67% Periodic Contact with 3rd Party 1 1 Exceeds Expectations 100.00% N/A N/A Com plaint or L ie n File d Tim e ly 0 0 N/A N/A N/A N/A Member Involved in Complaint vs. Lien 0 0 N/A N/A N/A N/A Subrogation Pursued for Maximum Recovery 1 1 Exceeds Expectations 100.00% N/A N/A Approval to Accept, Waive, or Settle 1 1 Exceeds Expectations 100.00% 100.00% 0.00% Excess Coverage
Tim e ly Initial Exce ss Re porting 3 2 Unsatisfactory 66.67% 100.00% -33.33% Timely Subsequent Excess Reporting 17 12 Below Expectations 70.59% 75.00% -4.41% Ti mel y Excess Rei mbursement Requests 2 2 Exceeds Expectations 100.00% N/A N/A Cl osi ng Excess Report Sent 0 0 N/A N/A N/A N/A
Score for Claim Handling - Technical 705 614 87.09% 90.50% -3.41%

7 AUDIT EXCEPTION DETAILS

Claim Handling – Administrative
Caseload
Adjuster Caseload
Opportunities 1 | Achieved 1
There are 11 dedicated adjusters handling claims for the City of Oakland. Two of these adjusters are predominately handling future medical claims. All caseloads are within the standard. The weighted values listed below include adjustment for the 2:1 ratio for future medical and medical only claims.

Case Review & Documentation
Examiner Reviews - Timing
Opportunities 944 | Achieved 917
Please see Addendum I for a detailed summary of opportunities and plan of actions meeting the criteria for this standard.

Examiner Reviews - Quality Plan of Action
Opportunities 152 | Achieved 112

1. P-6527 There is no basis for the file reserves listed in the plan of action (POA) and the expense reserves are currently understated.

2. P-6530 The reserve rationales outlined within the POAs are not accurate. The adjuster should have recognized that an OSIP compliant calculation was due.

3. P-6533 The reserve rationales outlined within the POAs are not accurate. It should have been recognized that an OSIP compliant calculation was due. The reserves are understated.

4. P-6539 The reserve rationales outlined within the POAs are not accurate. The POAs indicate the reserves were reviewed and include PD exposure of 23%. However, the indemnity reserves are insufficient for the outlined exposures.

5. P-6541 The reserve rationales outlined within the POAs are not accurate. The rationales state all discovery and expense is being paid on the accepted primary file. However, all legal billing is being paid on this file. The reserve review does not address the ongoing exposures to support the $10,500 in outstanding reserves for medical and cost containment expense.

6. P-6543 The reserve rationales outlined within the POAs are duplicative and do not include details including the last OSIP calculation date, current three year average, and current life expectancy. The adjuster should have recognized that an OSIP compliant calculation was due.

City of Oakland Other Accounts
Adjuster Indemnity Med Only F uture Med Indemnity Med Only Future Med Total Weighted Total
Al ma Atti ogbe 75 21 4 0 0 0 1 00 88
Candy Martin Del Campo 0 10 0 0 0 0 10 5
Candance Pierson 0 0 163 0 0 0 163 82
Dani el Chri stensen 3 0 120 0 0 0 123 63
Devon Franzel l a 80 6 8 0 0 0 94 87
Doris Manuzon 62 8 40 0 0 0 110 86
Jaki Stingily 86 12 7 0 0 0 105 96
Lorrai ne Lord 66 8 39 0 0 0 113 90
Mary Denham 81 7 2 0 0 0 90 86
Pearl i e James 87 0 5 0 0 0 92 90
Regina Woodson 78 34 2 0 0 0 114 96
Total 618 106 390 0 0 0 1114 866

8 7. P-6547 The POAs from 12/29/21 to 09/15/22 contain stale information. They inaccurately state the employee will be seeking a QME although the file settled on 10/16/20. The POAs do not include the future medical award details.

8. P-6548 The reserve rationales outlined within the POAs were not accurate. The adjuster should have recognized that an OSIP compliant calculation was due. This resulted in understated reserves.

9. P-6556 The reserve rationale outlined within the POAs were not accurate. The adjuster should have recognized that an OSIP compliant calculation was due. The reserves are currently understated.

10. P-6562 The reserve rationales outlined within the 09/12/22 and 12/09/22 POAs were not accurate. The adjuster should have recognized that an OSIP compliant calculation was due. This resulted in understated reserves.

11. P-6566 The reserve rationale outlined within the POA on 11/18/22 is not accurate. The adjuster should have recognized that an OSIP compliant calculation was due and should have also considered ongoing legal expenses. The reserves are currently understated.

12. P-6568 The POAs do not include a rationale for the outstanding reserves which are currently overstated. The adjuster mentions settlement will be attempted without having to return to the qualified medical evaluator (QME) for re-evaluation but does not mention the agreed medical evaluator’s (AME) re-evaluation scheduled for 03/15/23. There is one QME and one AME involved in this claim. The POAs do not discuss prior evaluation dates, outcomes, specialties, nor future evaluation dates. The current POA fails to outline what is needed to bring this claim to resolution.

13. P-6572 The POA's completed 04/21/22, 06/03/22, 07/18/22, 09/01/22 and 10/14/22 were duplicative of the POA completed 03/07/22. The POA's outlined a settlement authority request (SAR) would be completed to finalize the claim. The auditor was unable to locate timely follow up on the outlined plan of action.

14. P-6576 The reserve rationales outlined within the POAs were not accurate. The reserve rationales were not updated at the time of each review which resulted in understated reserves for the exposures related to ongoing medical care.

15. P-6578 The POAs completed 07/29/22, 09/12/22 and 10/27/22 are duplicative. The POA's outline a plan to reach out to the employee to discuss settlement. Auditor is unable to locate timely follow up on the outlined plan of action until the task was completed on 11/18/22.

16. P-6583 The reserve rationales outlined within the POAs were not accurate. The adjuster should have recognized that an OSIP compliant calculation was due. The reserves are currently overstated.

17. P-6585 The POAs do not include a rationale for the outstanding reserves which are currently overstated.

18. P-6594 The POAs completed on 12/13/21, 01/27/21 and 04/25/22 were duplicative of the POA completed on 10/29/21. The POAs did not recognize the AME's supplemental report dated 07/13/21 had been received on 07/23/21. They did not outline the AME results, nor a plan to bring the claim to resolution.

19. P-6598 The POAs completed on 09/09/22 and 10/24/22 outline a plan to contact the employee to discuss the QME results and claim resolution. The auditor was unable to locate timely follow up on the outlined plan of action as the employee had not been contacted as of the date of the audit.

20. P-6602 The 02/25/22 POA states that a SAR should be submitted based on the 03/09/21 MMI report of AME, Dr. Stark. There was no follow up on this until 04/11/22. The current POA completed on 10/31/22 fails to outline the current legal status, address the 10/20/22 supervisor review requesting follow up with DA, nor does it outline the plan for bringing the claim to resolution.

9 21. P-6603 The 09/23/22 POA outlines a plan to continue to review medical care for MMI status and closure of the file. The POA failed to recognize that the employee had not been treated since 06/03/22, that a closure letter was issued 08/10/22, and that the file was overdue for closure.

22. P-6611 The reserve rationales outlined within the POAs are not accurate. The adjuster should have recognized that an OSIP compliant calculation was due.

23. P-6613 The 06/02/22 POA outlines a plan to request settlement authority with no follow up action documented. The 07/15/22 POA outlines a plan to depose the QME for clarification on the ratings with no follow up action documented until 08/04/22 when the notice of hearing was received based on AA's DOR. The POAs lacked follow through on listed action items which led to discovery being closed before the ratings could be challenged.

24. P-6614 The 11/29/22 POA outlines the plan to close this file based on the right shoulder being included in the employee's newly filed 07/07/22 date of injury, 07/20/22 date injury, and corresponding CT. The POA fails to recognize that the AME reporting on the newer dates of injury is not finalized and liability for future medical care for the right shoulder has not been outlined.

The POA also fails to recognize that file closure is premature pursuant to CCR15400.2.

25. P-6616 The POAs do not include a rationale for the outstanding reserves which are currently overstated. The period of temporary disability (TD) listed in the POAs are inaccurate.

26. P-6619 The POAs do not include a rationale for the outstanding reserves which are currently understated.

27. P-6623 The POAs completed on 04/25/22, 06/17/22, 08/01/22, 09/15/22 and 10/28/22 outline a plan to complete the SAR and reach out to AA to discuss settlement. The auditor was unable to locate timely follow up on the outlined plan of action.

28. P-6624 The reserve rationales outlined within the POAs are not accurate. The adjuster should have recognized that an OSIP compliant calculation was due. The reserve rationale does not outline accurate annual averages, nor does it include the life expectancy used. This resulted in overstated reserves.

29. P-6625 The reserve rationales outlined within the POAs are not accurate. The adjuster should have recognized that an OSIP compliant calculation was due. The reserve rationale does not outline accurate annual averages, nor does it include the life expectancy used. This resulted in overstated reserves.

30. P-6630 The reserve rationales outlined within the POAs were not accurate. The adjuster should have recognized that an OSIP compliant calculation was due.

31. P-6631 The reserve rationale outlined within the POAs were not accurate. The adjuster should have recognized that an OSIP compliant calculation was due. The reserve rationale does not outline accurate annual averages, nor does it include the life expectancy used. This resulted in understated reserves.

32. P-6640 The reserve rationales outlined within the POAs were not accurate. The adjuster should have recognized that an OSIP compliant calculation was due. The reserve rationale does not outline accurate annual averages, nor does it include the life expectancy used. This resulted in understated reserves.

33. P-6642 The POAs do not include a rationale for the outstanding reserves. Auditor recommends a comprehensive reserve review for the anticipated med-legal evaluation, shoulder surgery, and future medical exposures.

34. P-6646 The reserve rationales outlined within the POAs were not accurate. The adjuster should have recognized that an OSIP compliant calculation was due. The reserve rationale does not outline accurate annual averages, nor does it include the life expectancy used. This resulted in understated reserves.

10 35. P-6648 The POAs completed on 09/08/22 and 10/22/22 were duplicative of the POA completed on 07/25/22. The POAs outlines a plan to follow up for a response from AA regarding a settlement demand. The auditor is unable to locate timely follow up on the outlined plan of action as the last contact with AA regarding a demand was on 07/01/22.

36. P-6653 The 07/26/22 and 10/20/22 POAs fail to address the reserves and that the file is overdue for an annual OSIP compliant reserve review. This resulted in overstated reserves.

37. P-6657 The reserve rationales outlined within the POAs are not accurate. The adjuster should have recognized that an OSIP compliant calculation was due.

38. P-6665 The 09/09/22 and 10/24/22 POAs outline a plan to address subrogation once the police report is received. The POAs fail to address the police report received on 08/25/22 and do not outline a plan to pursue subrogation.

39. P-6670 The reserve rationale outlined within the POAs are duplicative and do not include the details including the last OSIP calculation date, current three year average, and current life expectancy. The adjuster should have recognized that an OSIP compliant calculation was due.

40. P-6673 The 07/29/22 POA does not document the AME report which was received on 07/19/22, nor does it discuss the plan to bring the claim to resolution.

Supervisor Reviews
Opportunities 386 | Achieved 363
Please see Addendum I for a detailed summary of opportunities and supervisor reviews meeting the criteria for this standard.

Medical Only Conversion
Opportunities 4 | Achieved 3

1. P-6664 Based on the claim receipt date of 09/07/21, the file has been overdue for conversion to indemnity from the file reopen date of 09/12/22 through the date of the audit.

Communication
Ongoing Employee Contact
Opportunities 12 | Achieved 5

1. P-6567 The employee was TD from 02/15/22 to 10/18/22. There was a gap longer than 30 days in ongoing employee contact from 02/15/22 to 04/01/22 and 07/13/22 to 10/18/22.

2. P-6571 The employee was TD from 09/23/21 through the date of the audit. There was a gap longer than 30 days in ongoing employee contact from 10/04/21 to 12/01/21, 12/01/21 to 01/15/22, 01/15/22 to 02/23/22, 02/23/22 to 04/19/22, 04/19/22 to 06/28/22 and 08/11/22 to 10/14/22.

3. P-6575 The employee was paid 4850/TD benefits from 09/26/21 to 01/26/22. There was a gap of more than 30 days in ongoing employee contact from 11/22/21 to 01/04/22.

4. P-6628 The employee had surgery on 02/22/22 and there are no documented efforts to reach him within three business days of the procedure.

5. P-6635 The employee was TD from 09/27/22 through the date of the audit. There was a gap longer than 30 days in ongoing employee contact from 09/30/22 to 11/07/22.

6. P-6637 The employee was TD from 04/07/22 through the date of the audit. There was a gap longer than 30 days in ongoing employee contact from 05/08/22 to 07/01/22, 07/01/22 to 08/09/22, and 08/09/22 to 09/14/22.

7. P-6665 The employee was TD from 03/25/22 through the date of audit. There was a gap longer than 30 days in ongoing employee contact from 05/25/22 to 06/28/22.

11 Fiscal Handling
Payments on Correct Claims
Opportunities 12 | Achieved 11

1. P-6670 The medical provider payment issued on 02/14/22 for date of service 01/24/22 for MRI to the lumbar spine should have been paid from claim #210900000 as this claim is for the right hand.

File Balancing
Opportunities 38 | Achieved 32

1. P-6605 Biweekly life pension benefits were issued throughout the audit period. Based on the last file balance prior to the audit period on 04/09/21, file balancing was due 10/06/21. However, it was untimely completed 12/13/21.

2. P-6621 The employee was paid permanent disability (PD) from 07/31/18 through the date of the audit. Based on the last balance sheet completed prior to the audit period on 09/14/21, the subsequent balance sheet was due 03/13/22 and was untimely completed on 03/30/22.

3. P-6622 The employee was paid PD from 11/07/21 through the date of the audit. A semi-annual balance sheet was due 05/22/22 and was untimely completed on 06/09/22. A subsequent semi- annual balance sheet was due 12/04/22 and was untimely completed on 12/09/22.

4. P-6623 The employee was paid 4850/TD benefits from 02/02/21 to 03/04/22. A balance sheet was not completed at the time the ending TD notice was sent on 03/15/22. The balance sheet was completed late on 03/18/22.

5. P-6670 Permanent disability award payments began prior to the audit period on 07/08/21. An initial file balancing was due 01/02/22 and was untimely completed on 02/01/22.

6. The 12/16/21 file balancing was untimely based on the last balance completed on 03/09/21.

Claim Creation
Three Point Contact – Initial Employee Contact
Opportunities 39 | Achieved 38

1. P-6524 The claim was received on 07/01/22 with initial employee contact due by 07/06/22.

There is one documented attempt on 07/01/22. A contact letter was sent on 07/06/22. The auditor is unable to locate a third employee contact attempt documented in the first three days.

Three Point Contact – Initial Employer Contact
Opportunities 45 | Achieved 42

1. P-6559 The claim was received on 08/25/22 with initial employer contact due by 08/30/22. One initial employer contact was documented on 08/26/22. Auditor is unable to locate any additional contact attempt in the first three days.

2. P-6589 The claim was received on 01/21/22 with initial employer contact due by 01/26/22. The auditor was unable to locate any employer contact attempts documented in the first three days.

3. P-6666 The claim was received on 06/30/22 with initial employer contact due by 07/05/22. One employer contact attempt was documented on 07/01/22. The auditor was unable to locate any additional employer contact attempts documented in the first three days.

12 Reserves
Initial Reserves for Probable Value
Opportunities 46 | Achieved 46
The claims that met the criteria for this category also met the standard.

Initial Reserve Timely
Opportunities 46 | Achieved 43

1. P-6524 The initial reserves were due 07/14/22 and were untimely established on 07/19/22.

2. P-6529 The initial reserves were due 10/19/22 and were untimely established on 11/15/22.

3. P-6561 The initial reserves were due 01/24/22 and were untimely established on 01/25/22.

Claim Handling – Technical
Payments
Medical Bills Paid Timely
Opportunities 108 | Achieved 108
The claims that met the criteria for this category also met the standard.

Penalties Coded Correctly
Opportunities 0 | Achieved N/A
There were no applicable claims for this category.

Apportionment
Ruled In/Out
Opportunities 36 | Achieved 36
The claims that met the criteria for this category also met the standard.

Pursued Appropriately
Opportunities 22 | Achieved 22
The claims that met the criteria for this category also met the standard.

Disability Management
Proactive Return to Work
Opportunities 18 | Achieved 18
The claims that met the criteria for this category also met the standard.

Member Noticed of Permanent Work Restrictions
Opportunities 5 | Achieved 4

1. P-6584 The AME report outlining permanent work restrictions was received on 10/17/22. The permanent work restrictions were untimely sent to the member by the RTW coordinator on 11/02/22.

13 Reserving
Reserves Adjusted Timely
Opportunities 148 | Achieved 117

1. P-6527 The reserves were last reviewed and updated on 09/02/20. The file lacks documentation of regular reserve reviews during the audit period. A review is required at the time of regular diary review or at the time of a significant event regardless of if a reserve change is made. This resulted in understated expense reserves.

2. P-6530 The reserves were last reviewed and updated on 05/27/21. The file lacks documentation of regular reserve reviews with at least one OSIP compliant reserve review due during the audit period.

3. P-6533 The auditor was unable to locate a reserve review throughout the audit period with at least one OSIP compliant review warranted. This resulted in understated reserves.

4. P-6539 The reserves were last reviewed and updated on 09/08/20. The file is overdue for a reserve review based on the current exposures. Indemnity reserves are insufficient for the current indemnity exposures.

5. P-6541 The reserves were last reviewed and updated on 10/05/20. Auditor was unable to locate a reserve review throughout the audit period with at least one due.

6. P-6543 The auditor was unable to locate a reserve review throughout the audit period. The reserve rationales within the POAs completed during the audit period are duplicative and do not include details of the current three year average and life expectancy. The reserves were last reviewed and updated on 03/01/21. The file is overdue for an annual OSIP reserve review based on the current life expectancy.

7. P-6556 The last reserve review was completed on 03/15/21. The file is overdue for an annual OSIP compliant reserve review. The expense reserves are overstated by approximately $10,500.

8. P-6562 The auditor was unable to locate a reserve review throughout the audit period. The reserves were last reviewed and updated on 06/22/21. This resulted in understated reserves.

9. P-6566 The file lacks documentation of regular reserve reviews during the audit period. A review is required at the time of regular diary review. This resulted in understated reserves.

10. P-6568 The reserves were adjusted during the audit period on 09/26/22. However, they were not accurately reviewed and adjusted. The employee returned to work on 12/16/21. There is $38,908 outstanding in indemnity for TD. The outstanding medical reserves totaling $4,419 are insufficient for the current exposures. They do not contemplate ongoing discovery as the med legal evaluations and supplemental reports are still pending.

11. P-6576 The auditor was unable to locate a reserve review throughout the audit period. The reserves were last reviewed and updated on 09/28/21. The outstanding medical reserves totaling $989 are understated for the current exposures. They do not contemplate ongoing medical treatment.

12. P-6583 The auditor was unable to locate a reserve review throughout the audit period. The reserves were last reviewed and updated on 03/30/21. The outstanding medical reserves totaling $36,232 are overstated based upon the auditor’s OSIP compliant reserve calculation outlined within the audit worksheet.

13. P-6585 The reserves were last reviewed and updated on 12/28/21. The employee returned to work on 03/16/22 and the indemnity reserves are overstated. The indemnity reserves have $26,057 in 4850/TD outstanding. Auditor recommends a comprehensive reserve review.

14 14. P-6600 The AME's MMI report was received on 07/05/22. The reserves were untimely increased for the exposures on 10/18/22. A voucher was issued on 07/01/22. However, the file has not been reserved for the SJDV exposures. The file settled by way of C&R on 11/22/22. The $17,291 in outstanding medical reserves are overstated as the C&R is paid in full and there are no liens on file. The file is overdue for reserve review with adjustment for the current exposures.

15. P-6611 The reserves were adjusted during the audit period on 10/18/22 and 12/20/22.

However, the file lacks documentation of an annual OSIP compliant reserve calculation during the audit period with the last one completed on 04/07/21.

16. P-6613 The MMI report of the QME was received on 05/06/22. The reserves were untimely increased for the exposures on 08/04/22. The C&R is paid in full and there is $72,104 in outstanding indemnity reserves. The indemnity reserves are overstated for the exposures.

17. P-6614 The file is not eligible for administrative closure until 06/08/24. The reserves were prematurely reduced to $0 when the file was closed on 11/29/22. Although the employee is currently being treated for the same shoulder under a new claim, the auditor anticipates this file is under reserved by approximately $5,000 for treatment and expense exposures through eligibility for claim closure.

18. P-6616 The reserves were last reviewed and updated on 12/22/21. The employee returned to work on 05/23/22 and the indemnity reserves are overstated. Auditor recommends a comprehensive reserve review with reduction.

19. P-6619 The auditor was unable to locate a reserve review throughout the audit period. The reserves were last reviewed and updated on 09/27/21. The QME report dated 05/10/22 rates 15% for this date of injury totaling $14,645. The indemnity reserves are understated for the PD exposure.

20. P-6624 The auditor was unable to locate a reserve review throughout the audit period. The reserves were last reviewed and updated on 05/14/21. The outstanding medical reserves totaling $21,327 are overstated for the current exposures based on the OSIP calculation located within the audit worksheet.

21. P-6625 The auditor was unable to locate a reserve review throughout the audit period. The reserves were last updated 06/18/21. This resulted in overstated reserves.

22. P-6630 The auditor was unable to locate a reserve review throughout the audit period. The reserves were last reviewed and updated on 03/24/21. However, a review is required at the time of regular diary review or at the time of a significant event regardless of if a reserve change is made.

23. P-6631 The auditor was unable to locate a reserve review throughout the audit period. The reserves were last reviewed and updated on 05/07/21. This resulted in understated reserves based upon the auditor’s OSIP compliant reserve calculation located within the audit worksheet.

24. P-6640 The auditor was unable to locate a reserve review throughout the audit period. The reserves were last reviewed and updated on 02/26/21. This resulted in understated reserves based upon the auditor’s OSIP compliant reserve calculation outlined within the audit worksheet.

25. P-6642 The auditor was unable to locate a comprehensive reserve review throughout the audit period with at least one due.

26. P-6646 The auditor was unable to locate a reserve review throughout the audit period. The reserves were last reviewed and updated on 05/19/21. This resulted in understated reserves based upon the auditor’s OSIP compliant reserve calculation located within the audit worksheet.

27. P-6650 The reserves were last reviewed and updated on 08/18/21. The outstanding medical reserves totaling $5,661 are appropriate for the current exposures. However, a review is required at the time of regular diary review or at the time of a significant event regardless of if a reserve change is made.

15 28. P-6653 The last reserve review was completed prior to the audit period on 05/06/21. The file is overdue for annual OSIP reserve review based on reasonable anticipated future medical care and the current life expectancy. The reserves are overstated based on the calculation located within the audit worksheet.

29. P-6657 The reserves were last reviewed and updated on 06/23/21. The file lacks documentation of regular reserve reviews during the audit period with at least one due.

30. P-6670 The auditor was unable to locate a reserve review throughout the audit period with at least one OSIP compliant review warranted. The reserves were last updated 09/22/21.

31. P-6671 The reserves were last adjusted on 10/02/19. The file is overdue for comprehensive review and adjustment based on the current life expectancy and LP rate with consideration of COLA increases. The reserves are understated by approximately $21,000.

TD & 4850 Reserved Separately
Opportunities 33 | Achieved 33
All claims that met the criteria for this category also met the standard.

PD Exposure Includes Life Pension
Opportunities 4 | Achieved 3

1. P-6671 The PD reserve does not include LP exposure for the current life expectancy of 10.7 years and LP rate with consideration of COLA increases.

FM Reserves Consistent with OSIP Standards
Opportunities 34 | Achieved 15

1. P-6530 The reserves were last reviewed and updated on 05/27/21. The auditor was unable to locate an OSIP compliant reserve calculation prior to the audit period, nor could one be located during the audit period. At least one annual OSIP compliant calculation was due during the audit period.

2. P-6533 The auditor was unable to locate a reserve review throughout the audit period with at least one OSIP compliant review warranted. This resulted in understated reserves.

3. P-6543 The reserves were last reviewed and updated on 03/01/21. The auditor was unable to locate an OSIP compliant reserve calculation completed during the audit period with at least one reserve review due.

4. P-6556 The last reserve review was completed on 03/15/21. The file is overdue for an annual OSIP compliant reserve review. This resulted in overstated expense reserves.

5. P-6562 The last reserve review with adjustment was completed on 06/22/21. This file is overdue for an OSIP annual calculation.

6. P-6566 The reserves were last reviewed and updated on 09/13/21. The auditor was unable to locate an OSIP compliant reserve calculation completed during the audit period with at least one reserve review due.

7. P-6583 The reserves were last reviewed and updated on 03/30/21. The auditor was unable to locate an OSIP compliant reserve calculation completed during the audit period with at least one reserve review due.

8. P-6611 The file lacks documentation of an OSIP compliant reserve review during the audit period with the last one completed on 04/07/21.

9. P-6624 The reserves were last reviewed and updated on 05/14/21. The auditor was unable to locate an OSIP compliant reserve calculation completed during the audit period with at least one reserve review due.

16 10. P-6625 The reserves were last updated 06/18/21. The auditor was unable to locate an OSIP compliant reserve calculation completed during the audit period with at least one reserve review due.

11. P-6630 The reserves were last reviewed and updated on 03/24/21. The auditor was unable to locate an OSIP compliant reserve calculation completed during the audit period with at least one reserve review due.

12. P-6631 The reserves were last reviewed and updated on 05/07/21. The auditor was unable to locate an OSIP compliant reserve calculation completed during the audit period with at least one reserve review due.

13. P-6640 The reserves were last reviewed and updated on 02/26/21. The auditor was unable to locate an OSIP compliant reserve calculation completed during the audit period with at least one reserve review due.

14. P-6646 The reserves were last reviewed and updated on 05/19/21. The auditor was unable to locate an OSIP compliant reserve calculation completed during the audit period with at least one reserve review due.

15. P-6650 The reserves were last reviewed and updated on 08/18/21. The auditor was unable to locate an OSIP compliant reserve calculation completed during the audit period with at least one reserve review due.

16. P-6653 The last reserve review was completed prior to the audit period on 05/06/21. The auditor was unable to locate an OSIP compliant reserve calculation completed during the audit period with at least one reserve review due.

17. P-6657 The reserves were last reviewed and updated on 06/23/21. The auditor was unable to locate an OSIP compliant reserve calculation completed during the audit period with at least one reserve review due.

18. P-6670 The reserves were last updated 09/22/21. The auditor was unable to locate an OSIP compliant reserve calculation completed during the audit period with at least one reserve review due.

19. P-6671 The last OSIP compliant reserve review was completed prior to the audit period on 10/02/19. The file is overdue for an OSIP compliant reserve review with at least one due during the audit period.

Allocated Reserve Accurate
Opportunities 148 | Achieved 136

1. P-6527 Expense reserves for cost containment are averaging 13% of the medical spent. The outstanding expense reserves totaling $177.50 are understated based on $15,715 in outstanding medical reserves.

2. P-6533 Based on the medical bills paid to date the cost containment fees have been equivalent to roughly 30%.Therefore, based on the projected medical costs, the current expense reserves of $1,467 are understated.

3. P-6556 There are no outstanding legal or discovery issues on this claim. Based on $10,850 in outstanding medical reserves, the outstanding expense reserves totaling $11,450 are overstated.

4. P-6566 The current outstanding allocated/expense reserves of $3,762.50 are understated. They do not contemplate cost containment for the outstanding medical reserves and ongoing litigation fees (AA has filed a petition for N&F).

5. P-6600 The C&R is paid in full, and the file remains open. The outstanding expense reserves totaling $7,626 are overstated as there are no outstanding medical or discovery issues for this claim and the DA bills were not paid on this claim.

17 6. P-6614 The expense reserves were prematurely reduced to $0 due to premature closure. They are understated for the exposures for cost containment related to anticipated future medical care.

7. P-6624 Based on the medical bills paid to date the cost containment fees have been equivalent to roughly 7%. Therefore, based on the projected medical costs, the current expense reserves of $3,215 are overstated.

8. P-6625 Allocated/expense reserves are overstated as all legal and discovery issues have resolved and there is $2,218 still remaining in outstanding legal reserves.

9. P-6631 Based on the medical bills paid to date the cost containment fees have been equivalent to roughly 22%. Therefore, based on the projected medical costs, the current expense reserves of $1,342 are understated.

10. P-6640 Based on the medical bills paid to date the cost containment fees have been equivalent to roughly 12%. Therefore, based on the projected medical costs, the current expense reserves of $5,717 are understated.

11. P-6646 Based upon the three year paid values the cost containment fees have been equivalent to 22% of the medical spent. Using 22% of the medical based upon the auditor's OSIP calculation the current outstanding expense reserve of $3,264 is understated.

12. P-6653 Based on the medical bills paid to date the cost containment fees have been equivalent to roughly 10%. Therefore, based on the projected medical costs, the current expense reserves of $5,075 are overstated.

Reserve Detail
No recommended changes 131 claims
Increase recommended 12 claims
Decrease recommended 9 claims
Total estimated reserve variance $141,899

Resolution of Claim
Resolution Pursued Timely
Opportunities 37 | Achieved 22

1. P-6572 The PTP's MMI report was received on 01/13/22. The SAR was untimely completed on 10/25/22. It was approved by the member on 10/27/22. The stips were untimely sent to the employee on 11/28/22.

2. P-6578 The PTP's MMI report was received on 06/10/22. The SAR was timely completed on 06/15/22 and was approved by the member on 08/25/22. As of the date of the audit, the stips have not been sent to the employee. The file is overdue for settlement follow up.

3. P-6594 The AME's supplemental report dated 07/13/21 was received prior to the audit period on 07/23/21. The SAR was untimely completed on 06/15/22.

4. P-6596 The MMI report dated 09/15/21 was received prior to the audit period on 09/28/21. The informal rating was received on 10/05/21. The SAR was overdue from the start of the audit period until it was completed on 12/21/21. Settlement follow up is on hold pending IDR and exhaustion of 4850.

5. P-6598 The QME's MMI report dated 08/22/22 was received on 09/06/22. The auditor was unable to locate documentation showing appropriate action was taken within 10 working days to finalize the claim. The DEU rating was untimely requested on 12/10/22 and is currently pending.

18 6. P-6600 The AME's MMI report was received on 07/05/22. The auditor is unable to locate any action taken towards resolution within ten days of receipt of the report. The defense attorney (DA) letter outlining a C&R recommendation on all three claims was received on 09/09/22. The adjuster called the DA on 09/16/22 and 10/03/22 to finalize ratings, confirm applicant attorney’s (AA) agreement to settle, and confirm the file is ready for C&R. The final ratings were received via email on 10/04/22 and the SAR was untimely submitted on 10/18/22.

7. P-6602 The employee was found to be at maximum medical improvement (MMI) prior to the audit period on 03/09/21. The settlement authority request (SAR) was pending exhaustion of TD/4850 benefits. These benefits ended on 11/29/21. The SAR was untimely submitted on 04/25/22. The employer approved the SAR on 05/23/22 and an offer was made that day. The AA set the depo of the AME over a rating dispute, but the depo was cancelled on 08/01/22. There was an untimely settlement follow up with the DA documented on 11/28/22.

8. P-6603 There was no lost time for this medical only claim. A 30 day closure letter was issued on 08/10/22. The file was untimely closed on 11/01/22.

9. P-6613 The QME's MMI report was received on 05/06/22 with no actions towards resolution documented within 10 working days. The DA provided a settlement analysis and confirmed agreement with AA on 09/21/22. The SAR was untimely submitted to the employer on 10/06/22.

10. P-6614 This claim was settled by way of Stips on 03/15/22. The PD was paid on 03/21/22 for the period of 02/10/21 to 03/23/21, and the last medical treatment date was on 06/08/22. Pursuant to CCR15400.2, the file is not eligible for administrative closure until 06/08/24. The file was prematurely closed on 11/29/22.

11. P-6623 The QME's MMI report was received on 04/13/22. Auditor is unable to locate documentation showing appropriate action was taken within 10 working days to finalize the claim. The SAR was untimely completed on 11/23/22.

12. P-6641 The AME's MMI report was received on 11/23/22. Auditor is unable to locate documentation showing appropriate action was taken within 10 working days to finalize the claim.

13. P-6648 The AME's MMI report was received on 06/03/22. Auditor is unable to locate documentation showing appropriate action was taken within 10 working days to finalize the claim. The SAR was untimely completed on 07/01/22.

14. P-6668 The QME's report was received prior to the audit period on 10/13/21 and sent for informal rating on 10/23/21. The rating was received on 10/26/21. The SAR was untimely completed on 12/17/021.

15. P-6673 The AME's MMI report was received on 07/19/22. Auditor is unable to locate documentation showing appropriate action was taken within 10 working days to finalize the claim. The SAR was untimely completed on 11/30/22.

Settlement Valuation
Opportunities 26 | Achieved 26
All claims that met the criteria for this category also met the standard.

Medicare’s Interests Protected
Opportunities 0 | Achieved N/A
There were no applicable claims for this category.

19 Settlement Authority
EIA Settlement Authority Requested
Opportunities 0 | Achieved N/A
There were no applicable claims for this category.

Member Settlement Authority Requested
Opportunities 26 | Achieved 26
All claims that met the criteria for this category also met the standard.

Litigated Claims
Initiate Investigation Material to Potential Litigation Opportunities 0 | Achieved N/A
There were no applicable claims for this category.

Proper Litigation Management and Defense Attorney on Panel Opportunities 32 | Achieved 28

1. P-6594 The AME report was received prior to the audit period on 07/23/21 with no action towards resolution documented until the SAR was completed on 06/15/22. The file lacks documentation of proactive litigation management showing the examiner maintaining control of the ongoing claim activities to bring the claim to resolution. A defense attorney was not considered to assist with resolution.

2. P-6602 The file was referred to a DA on 07/22/22 when the adjuster received notice that the AA scheduled the deposition of the AME due to a rating dispute. The depo was cancelled on 08/01/22. The auditor is unable to locate any follow up until an email was sent to the DA on 11/28/22. A current legal POA is not evident.

3. P-6613 The MMI report of the AME was received on 05/06/22. There were no proactive litigation communications with the AA to bring the file to resolution, nor discussions about the rating disputes. The first documented legal action was on 08/04/22 when the file was referred to a DA due to AA filing a DOR. The DA tried to set the deposition of the QME to reduce the PD exposures. However, the judge thought there was too much time between when the report received date and the date it was referred to defense counsel, so discovery was closed, and the matter was set for trial.

4. P-6673 The file lacks documentation of proactive litigation management. A DA is not currently assigned. Auditor is unable to locate documentation of contact between the examiner and AA upon receipt of the AME report to move the case to resolution.

Subrogation
Identify & Notice 3rd Party Timely
Opportunities 3 | Achieved 1

1. P-6542 Subrogation was recognized when the claim was reported 04/14/22. A request for the police report was due by 04/27/22 and was untimely sent 06/15/22. The police report was received 08/30/22 and the adverse party was placed on notice, late, on 11/01/22.

2. P-6665 The police report was requested on 08/17/22 and was received on 08/25/22. There has been no documentation of investigation into the subrogation potential. Notice has not been issued to the adverse party.

20 Periodic Contact with 3rd Party
Opportunities 1 | Achieved 1
The claim that met the criteria for this category also met the standard.

Complaint or Lien Filed Timely
Opportunities 0 | Achieved N/A
There were no applicable claims for this category.

Member Involved in Complaint vs. Lien
Opportunities 0 | Achieved N/A
There were no applicable claims for this category.

Subrogation Pursued for Maximum Recovery
Opportunities 1 | Achieved 1
The claim that met the criteria for this category also met the standard.

Approval to Accept, Waive or Settle 3rd Party Case
Opportunities 1 | Achieved 1
The claim that met the criteria for this category also met the standard.

Excess Coverage
Timely Initial Excess Reporting
Opportunities 3 | Achieved 2

1. P-6567 The claim met excess reporting criteria upon receipt on 02/17/22. The initial excess report was due by 02/24/22 and was untimely sent on 02/27/22.

Timely Subsequent Excess Reports
Opportunities 17 | Achieved 12
Please see Addendum I for a detailed summary of opportunities and excess reports meeting the criteria for this standard.

Timely Excess Reimbursement Requests
Opportunities 2 | Achieved 2
The claims that met the criteria for this category also met the standard.

Closing Excess Report Sent
Opportunities 0 | Achieved N/A
There were no applicable claims for this category.
21 AUDITED BUT NOT SCORED RESULTS

Category Points Available Points % Prior % Variance
Supervi sor Casel oad 1 1 100.00% 100.00% 0.00%
Respond to Written Inquiries 76 76 100.00% 100.00% 0.00% Ongoing Employer Communication/Reporting 0 0 N/A 100.00% N/A Initial De cision 45 43 95.56% 82.14% 13.41%
Final De cision 13 13 100.00% 100.00% 0.00%
AOE/COE Investigation 14 13 92.86% 100.00% -7.14%
Indexing 46 46 100.00% 100.00% 0.00%
Initial TD/PD Paym e nt 14 11 78.57% 81.82% -3.25%
DWC Noti ce 79 58 73.42% 83.33% -9.92%
Subsequent TD/PD Payments 21 19 90.48% 97.06% -6.58%
Overpayments 5 5 100.00% 100.00% 0.00%
Undisputed Awards Paid Timely 9 9 100.00% 100.00% 0.00% Copy of Award to Excess 0 0 N/A 100.00% N/A
Me dical Bills Obje ction L e tte rs 2 2 100.00% 100.00% 0.00% Empl oyee Rei mbursements Ti mel y 13 13 100.00% 100.00% 0.00% Advance Travel Ti mel y 25 14 56.00% 81.25% -25.25%
Sel f-Imposed Penal ti es Pai d 1 1 100.00% N/A N/A
Penal ty Rei mbursement 1 0 0.00% N/A N/A
Proper Use of UR 60 60 100.00% 100.00% 0.00%
NCM Used Appropriately 5 5 100.00% N/A N/A
Proof of Member/EIA Authority 18 18 100.00% 95.45% 4.55% Member Invol ved i n Legal Acti vi ti es Where Appropri ate 0 0 N/A 100.00% N/A 37 Appendix D
AON
Actuarial Review of the Self-Insured Workers’
Compensation Program
Period ending June 30, 2022
5600 W 83rd Street, 8200 Tower, Suite 1100
Minneapolis, MN 55437
www.aon.com
Aon | Global Risk Consulting | Actuarial and Analytics
City of Oakland,
California
Actuarial Study of the
Self-Insured Workers’ Compensation Program
as of June 30, 2022
August 29, 2022

5600 W 83rd Street, 8200 Tower, Suite 1100
Minneapolis, MN 55437
www.aon.com
Aon | Global Risk Consulting | Actuarial and Analytics
August 29, 2022
City of Oakland
150 Frank H. Ogawa Plaza, Second Floor
Oakland, California 94612
Attn: Mr. Andrew Lathrop
Risk Manager
Actuarial Study of the
Self-Insured Workers’ Compensation Program
as of June 30, 2022
This study has been completed for the City of Oakland, California, for the specific objectives listed in the study. It contains the analysis and conclusions of our work.

Each section and appendix of the study is an integral part of t he whole. We recommend a review of the entire study prior to reliance upon this study.

No key personnel have a relationship with the City of Oakland, California, that may impair our objectivity.

Please call if you have any questions. Thank you for the opportunity to be of service.

Respectfully submitted,
Aon Risk Consultants, Inc.

B y
Tim Banick, FCAS, MAAA Samantha Millner
Regional Director and Actuary Consultant
Additional Team Members: Alison Millerbernd, Actuarial Analyst GL:bc
X:\Clients\Actuarial\O\Oakland, City of 904\2022_06_30\Report\Oakland_WC_063022_082422.doc

Table of Contents

I. Background ................................................ .......................................................... 1

II. Objectives ............................................... .............................................................. 3

III. Conclusions .......................................................................................................... 4

Appendices
A Conditions and Limitations
B Glossary of Actuarial Terms
C Exhibits

I. Background

The City of Oakland (the City) was fully self-insured for worke rs’ compensation until August 1, 2004. Effective August 2, 2004, the City began purchasing excess insurance.

The history of the City’s self-insured retentions for workers’ compensation is as shown in Table I-1.

Table I-1
Self-Insured Retentions
(Workers’ Compensation)

Claim Period
(1)
Self-Insured
Retention
(2)
To 8/1/04 Unlimited
8/2/04 to 6/30/08 $1,000,000
7/1/08 and subsequent 750,000

Note: Above informati on provided by the City.

A self-insured retention of $750,000 is assumed through 2023/24.

We have not reviewed the collectibility of the excess insurance . JT2 administers the workers’ compensation program.

The fiscal period runs from July 1 through June 30.

Data

Loss data valued as of June 30, 2022 was provided to us by the City. The City also provided payroll for 2021/22. Payroll projections for 2022/23 and 2023/24 are based on a 1% trend.

In conducting this analysis, we relied upon the provided data without audit or independent verification; however, we reviewed it for reasonabl eness and consistency.

Any inaccuracies in quantitative data or qualitative representa tions could have a significant effect on the results of our review and analysis. Any material discrepancies discovered in the loss or exposure data by the City or any other parties should be reported to us immediately, and if warranted, we will make appr opriate amendments to the report.

Consistent with the prior study, we have combined several claim s from 2009 into one occurrence that was identified by the City.

1 COVID-19

The estimates provided in this report have been adjusted for the potential impact of the COVID-19 pandemic in the following manner:
● Exposures were provided by the City taking into account the impacts of COVID-19 to their exposure basis of payroll;
● No adjustments were specifically made related to COVID-19’s potential impact to the frequency or severity of claims; and
● A risk margin has not been specifically added to our unpaid liability estimates specifically related to COVID-19.

The potential short- and long-term impacts of this emerging risk are not fully known.

Consequently, the uncertainty in our estimates is greater than it would otherwise be. The adjustments above are based on judgment and limited qualitative and quantitative information available at this time. They do not contemplate all potential impacts related to COVID-19 and its economic, political, and social consequences. 2 II. Objectives

The specific objectives of this study are:

1. Estimate Outstanding Losses. Estimate outstanding losses (including allocated loss adjustment expenses [ALAE]) as of June 30, 2022.

The estimated outstanding losses are the cost of unpaid claims. The estimated outstanding losses include case reserves, the development of kn own claims and incurred but not reported (IBNR) claims. ALAE are the direct ex penses for settling specific claims. The amounts are limited to the self-insured retention.

2. Project Ultimate Losses. Project ultimate losses (including ALAE) for 2022/23 and 2023/24.

The projected ultimate losses are the accrual value of losses with accident dates during 2022/23 and 2023/24, regardless of report or payment dat e. The amounts are limited to the self-insured retention.

3. Project Losses Paid. Project losses paid during the 2022/23 and 2023/24 years.

The projected losses paid are the claim disbursements during 20 22/23 and 2023/24, regardless of accident or report date. The amounts are limited to the self-insured retention.

4. Compare to Previous Actuarial Study. Compare to the previous actuarial study valued as of June 30, 2021.

5. Size of Loss Distribution Analysis . Analyze the distribution of losses in various layers.

6. Affirm GASB Statement No. 10. Provide a statement affirming the conclusions of this report are consistent with Governmental Accounting Standards Board (GASB) Statement No. 10.

3 III. Conclusions

We have reached the following conclusions:

1. Estimate Outstanding Losses

We estimate outstanding losses as of June 30, 2022 to be as shown in Table III-1.

Table III-1
Estimated Outstanding Losses
at Expected (50%) Confidence Level
June 30, 2022

Item Amount
(1) (2)
(A) Estimated outstanding losses $69,530,774
(B) Present value of estimated outstanding losses 61,678,900

Note: (A) and (B) are from Exhibit WC-11.

The estimated outstanding losses decreased by $4.1 million from our prior estimate of $73,623,697 as of June 30, 2021 to $69,530,774 as of June 30, 2022. The decrease consists of:
 + $25.3 million from the additional year (2021/22) of exposure ,  - $23.3 million for claim payments made during 2021/22, and  - $6.1 million due to a decrease in projected ultimate losses for claim periods 2020/21 and prior. This decrease reflects lower than expected l oss development, as discussed on pages 12 and 13.

The present value of the estimated outstanding losses is the am ount of money, discounted for anticipated investment income, required to meet unpaid claims. It is calculated based on a 2.5% yield on investments, as previously provided by the City.

The estimated outstanding losses reflect the excess insurance maintained by the City.

GASB Statement No. 10 requires public entities to recognize the impact of all benefits paid for work-related injuries.

The implementation guide for GASB Statement No. 10 specifies th at a liability for outstanding unallocated loss adjustment expenses (ULAE) needs to be established for governmental entities. ULAE are primarily composed of future claims administration for open claims. They are typically 5% to 10% of the estimated outstanding losses.

‘4850’ benefits are a full-salary (12 months) benefit for safet y personnel. They are typically about 5% of the estimated outstanding losses.

4 2. Project Ultimate Losses

We project ultimate losses for 2022/23 and 2023/24 to be as shown in Tables III-2A and III-2B.

Table III-2A
Projected Ultimate Losses
2022/23

Note: (A) and (B) are from Exhibit WC-10.

Table III-2B
Projected Ultimate Losses
2023/24

Item
Projected
Payroll
(000)
Loss Rate
per $100 of
Payroll
Projected
Ultimate
Losses
(1) (2) (3) (4)
(A) Full Value $437,187 $5.25 $22,973,000
(B) Present Value 437,187 4.73 20, 694,000

Note: (A) and (B) are from Exhibit WC-10.

The projected ultimate losses have increased by 9.6% compared to the projection in the prior study. This is due to a 6.5% increase in estimated payroll and a 2.8% increase in the projected loss rate.

Table III-2C
Comparison of Projected Ultimate Losses
2021/22 and 2022/23

Claim Period
Projected
Payroll
(000)
Loss Rate
per $100 of
Payroll
Projected
Ultimate
Losses
(1) (2) (3) (4)
(A) 2021/22 (prior study) $406,341 $5.06 $20,555,000
(B) 2022/23 (current study) $432,858 $5.20 22,520,000
(C) Change (B) - (A) $26,517 $0.14 $1,965,000

Item
Projected
Payroll
(000)
Loss Rate
per $100 of
Payroll
Projected
Ultimate
Losses
(1) (2) (3) (4)
(A) Full Value $432,858 $5.20 $22,520,000
(B) Present Value 432,858 4.69 20,286,000
5 The present value of the projected ultimate limited losses is the amount of money, discounted for anticipated investment income, required to meet claims. It is calculated based on a 2.5% yield on investments, as provided by the City.

All costs other than losses are additional.

3. Project Losses Paid

We project losses paid during 2022/23 and 2023/24 to be as shown in Table III-3.

Table III-3
Projected Losses Paid
2022/23 and 2023/24

Item 2022/23 2023/24
(1) (2) (3)
(A) Projected losses paid $19,349,005 $20,286,058

Note: (2) is from Exhibit WC-12.
(3) is from Exhibit WC-13.

All costs other than losses are additional.

6 Loss Experience Trends

Graphs III-1 and III-2 show loss experience trends for workers’ compensation as measured by loss rate per $100 of payroll and frequency and severity, respectively.

Graph III-1
Loss Rate per $100 of Payroll
(Workers’ Compensation)

Note: Loss rates per $100 of payroll are from Exhibit WC-10, co lumns (4) and (7).

7 Graph III-2
Frequency and Severity
(Workers’ Compensation)

Note: Frequency amounts are from Exhibit WC-8, Section I, column (7).

Severity amounts are based on Exhibits WC-8 and WC-9.

The frequency for 2019/20 through 2021/22 is relatively high du e to the reported number of COVID-19 claims. The incurred values of these claims are re latively low, resulting in a lower severity for these years.
8 Graph III-3 shows the composition of the projected ultimate lim ited losses for workers’ compensation.

Graph III-3
Composition of Projected Ultimate Limited Losses
(Workers’ Compensation)

Note: Amounts through 2021/22 are from Exhibit WC-11.

Amounts for 2022/23 and 2023/24 are from Exhibit WC-10.

A list of large claims with limited reported incurred losses $500,000 or greater as of June 30, 2022 is as shown in Exhibit WC-15.

9 4. Compare to Previous Actuarial Study

Graphs III-4 and III-5 are graphical comparisons of the reporte d incurred losses and projected ultimate losses, respectively, by fiscal year of occu rrence of the workers’ compensation program from the previous study (report dated October 22, 2021) to the current study.

Graph III-4
Comparison of Limited Reported Incurred Losses
as of June 30, 2021 and June 30, 2022

Note: Amounts as of June 30, 2021 are from the previous actuari al study.

Amounts as of June 30, 2022 are from Exhibit WC-1.

10 Graph III-5
Comparison of Projected Ultimate Limited Losses
as of June 30, 2021 and June 30, 2022

Note: Amounts as of June 30, 2021 are from the previous actuari al study.

Amounts as of June 30, 2022 are from Exhibits WC-9.

For all claims through 2020/21, the change in the projected ultimate limited losses from June 30, 2021 to June 30, 2022 was -1.0%.

11 We compare the projected ultimate limited losses by year as of June 30, 2021 and June 30, 2022 as shown in Table III-4A.

Table III-4A
Comparison of Projected Ultimate Limited Losses
as of June 30, 2021 and June 30, 2022

Note: (2) is from the prior actuarial study.
(3) is from Exhibit WC-9 and Exhibit WC-10.

The City experienced generally lower than expected loss development for most years, most notably from 2011/12 through 2020/21, resulting in a decre ase in the estimated ultimate losses for most of these years. The estimate for 2021/22 has increased from the prior projection, due to a 6.5% increase in payroll, as well as greater than expected paid and incurred loss development.

Claim Period
Projected
Ultimate Limited
Losses as of
6/30/21
Projected
Ultimate Limited
Losses as of
6/30/22
Change
(3) - (2)
Percentage
Change
(4) / (2)
(1) (2) (3) (4) (5)
to 2002/03 $273,354,783 $276,352,000 $2,997,217 1.1%
2003/04 22,551,000 22,599,000 48,000 0.2%
2004/05 17,673,219 17,740,000 66,781 0.4%
2005/06 17,341,000 17,360,000 19,000 0.1%
2006/07 15,407,000 15,296,000 (111,000) -0.7%
2007/08 14,742,000 14,606,000 (136,000) -0.9%
2008/09 17,427,000 17,412,000 (15,000) -0.1%
2009/10 17,775,000 17,841,000 66,000 0.4%
2010/11 21,526,000 21,529,000 3,000 0.0%
2011/12 21,139,000 20,833,000 (306,000) -1.4%
2012/13 16,829,000 16,388,000 (441,000) -2.6%
2013/14 17,104,000 16,422,000 (682,000) -4.0%
2014/15 14,164,000 13,552,000 (612,000) -4.3%
2015/16 20,638,000 19,075,000 (1,563,000) -7.6%
2016/17 21,530,000 19,887,000 (1,643,000) -7.6%
2017/18 16,302,000 15,539,000 (763,000) -4.7%
2018/19 16,431,000 15,145,000 (1,286,000) -7.8%
2019/20 16,677,000 15,494,000 (1,183,000) -7.1%
2020/21 22,844,000 22,265,000 (579,000) -2.5%
2021/22 20,555,000 25,316,000 4,761,000 23.2%
Total $622,010,002 $620,651,000 ($1,359,002) -0.2%
12 As part of our analysis, we com pared how claims emerged during the past 12 months to the expected emergence during that period. The expected emergen ce is based on the projected ultimate losses, the reported paid and incurred losse s, and the selected loss development factors from the prior actuarial study. The actual and expected emerged losses, as well as the difference between these amounts are shown in Table III-4B.

Table III-4B
Comparison of Actual and Expected Experience
June 30, 2021 to June 30, 2022

Paid Losses in the Period Incurred Losses in the Period Claim
Period
Paid
Expected Paid Actual
Difference
(3) - (2)
Incurred
Expected
Incurred
Actual
Difference
(6) - (5)
(1) (2) (3) (4) (5) (6) (7)
to 2002/03 $255,806 $1,285,810 $1,030,004 $110,798 $2,755,710 $2,644,911 2003/04 55,552 151,763 96,211 24,133 47,143 23,010
2004/05 33,081 81,702 48,621 14,414 65,631 51,216
2005/06 64,666 68,821 4,155 35,326 41,332 6,005
2006/07 26,150 11,896 (14,254) 19,086 (75,007) (94,092) 2007/08 47,604 96,848 49,244 20,971 (70,669) (91,639)
2008/09 46,933 63,697 16,764 25,972 46,955 20,983
2009/10 64,274 46,122 (18,152) 38,533 129,748 91,216
2010/11 131,004 288,336 157,332 83,843 138,535 54,692
2011/12 131,764 101,851 (29,913) 87,411 (66,443) (153,854) 2012/13 213,498 248,336 34,838 165,298 9,121 (156,177)
2013/14 161,554 140,817 (20,738) 167,102 (109,999) (277,101) 2014/15 245,487 322,028 76,541 188,031 136,089 (51,942) 2015/16 523,230 564,423 41,193 410,940 57,212 (353,728) 2016/17 999,233 828,640 (170,593) 500,315 326,721 (173,594) 2017/18 1,158,553 1,415,511 256,958 397,151 786,218 389,067 2018/19 1,915,637 2,142,551 226,914 1,023,177 642,861 (380,316) 2019/20 2,676,192 2,838,434 162,242 1,747,049 1,859,528 112,479 2020/21 4,786,661 6,177,924 1,391,263 6,241,084 6,280,952 39,868 2021/22 3,027,598 6,413,415 3,385,817 7,895,062 12,295,659 4,400,597 Total $16,564,477 $23,288,924 $6,724,447 $19,195,697 $25,297,299 $6,101,602

Note: (2) and (5) are expected amounts from June 30, 2021 to Ju ne 30, 2022. (3) and (6) are the actual ex perience from June 30, 2021 to June 30, 2022.

13 5. Size of Loss Distribution Analysis

Table III-5A shows the distribution of losses in various layers for workers’ compensation.

Table III-5A
Size of Loss Distribution
(Workers’ Compensation)

Claim Size
Total
Reported
Claims
Percent of
Total
(2)/Total(2)
Cumulative
Percent of
Total
Total Reported
Incurred
Losses
Percent of
Total
(5)/Total(5)
Cumulative
Percent of
Total
(1) (2) (3) (4) (5) (6) (7)
(A) $1 to $5,000 31,202 78.2% 78.2% $26,653,727 4.3% 4.3% (B) $5,000 to $10,000 2,129 5.3% 83.6% 14,933,444 2.4% 6.7% (C) $10,000 to $25,000 2,076 5.2% 88.8% 33,698,765 5.5% 12.2% (D) $25,000 to $50,000 1,471 3.7% 92.5% 52,640,596 8.5% 20.7% (E) $50,000 to $100,000 1,302 3.3% 95.7% 92,818,415 15.0% 35.8% (F) $100,000 to $250,000 1,306 3.3% 99.0% 204,701,413 33.2% 69.0% (G) $250,000 to $500,000 320 0.8% 99.8% 103,067,977 16.7% 85.7% (H) $500,000 to $750,000 44 0.1% 99.9% 26,925,191 4.4% 90.0% (I) $750,000 to $1,000,000 14 0.0% 100.0% 11,918,321 1.9% 92.0% (J) Over $1,000,000 15 0.0% 100.0% 49,662,083 8.0% 100.0% (K) Total
(A) … (J) 39,879 100% $617,019,933 100%

Note: See Exhibit WC-16. Claim counts exclude claims with incur red value of $0.

For workers’ compensation, about 84% of the non-zero claims rep orted are below $10,000 and represent about 7% of the incurred amounts. The rem aining 16% of the claims consume about 93% of the incurred amounts.

A size of loss distribution by year and loss layer as of June 3 0, 2022 is as shown in Exhibit WC-16.

14 The reported workers’ compensation claim experience underlying our analysis is shown below in Graphs III-6 and III-7, with each point representing one claim. The amounts are gross of excess insurance.

Graph III-6
Distribution of Workers’ Compensation Losses
Incurred Less Than $100,000

Graph III-7
Distribution of Workers’ Compensation Losses
Incurred Greater Than $100,000

Note: A large claim with $13 million incurred is not shown in the above graph. 15 6. Affirm GASB Statement No. 10

We affirm the conclusions of this report are consistent with GASB Statement No. 10. 16 Appendix A

Conditions and Limitations

It is important to understand the conditions and limitations listed below. Each chapter and section is an integral part of the whole study. If there are questions, please contact Aon for clarification.

• Data Quality In conducting this analysis, we relied upon the provided data without audit or independent verification; however, we reviewed it for reasonableness and consistency. Any inaccuracies in quantitative data or qualitative representations could have a signifi cant effect on the results of our review and analysis. Any material discrepancies discovered in the loss data by the organization or any other parties should be reported to us immediately, and if warranted, we will make appropriate amendments to the report.

• Economic Environment. Unless otherwise stated, we assumed the current economic conditions will continue in the foreseeable future.

• Insurance Coverage. Unless otherwise stated, we assumed no insurance coverage changes (including coverage provided by the organization to others) subsequent to the date this study was prepared. This includes coverage language, self-insured retention, limitations and similar issues.

• Insurance Solvency. Unless otherwise stated, we assumed all insurance purchased by the organization is from solvent sources payable in accordance with terms of the coverage document.

• Interest Rate. The exhibits specify the annual interest rate used.

• Methodology. In this study, different actuarial methods were applied. In some instances, the met hods yield significantly disparate results. The estimates, projections and recommendations in this study reflect our judgments as to the best method or combination of methods that are most reliable and reflective of the exposure to loss.

• Reproduction. Use of this report is limited to the organization for the specific purpose described in the Introduction section. Other uses are prohibited without an executed release with Aon.

Distribution by the organization is unrestricted. The report should only be distributed in its entirety including all supporting exhibits.

• Risk and Variability. Insurance is an inherently risky enterprise. Actual losses may vary significantly from our estimates, projections and recommendations. They may emerge higher or lower.

17 • Statutory and Judicial Changes. Legislatures and judiciaries may change statutes that govern indemnification. This includes benefit levels for workers compensation, immunities and limitations for liability, and other similar issues. Unless otherwise stated, we assumed no statutory changes subsequent to the date this study was prepared.

• Supplemental Data. In addition to the data provided by the organization, we supplemented our analysis with data from similar organizations and insurance industry statistics, as we deemed appropriate.

• Usage. This study has been prepared for the usage of the organization shown on the transmittal page. It was not prepared for and may not be appropriate for use by other organizations. Other organizations should obtain written permission from Aon prior to use of this study.

18 Appendix B

Glossary of Actuarial Terms

Actuarial Methods (Most Common)

A major objective of an actuarial study is to statistically project ultimate losses. The following actuarial methods are the most common:

• Developed Paid Losses
• Developed Reported Incurred Losses
• Developed Case Reserves
• Frequency Times Severity Analysis
• Loss Rate Analysis

The following describes each method:

1. Developed Paid Losses. Paid losses represent the amounts actually paid to claimants (less excess insurance recoveries). As time goes on, loss payments continue until all claims are closed and there are no remaining payments expected.

At this time, the ultimate losses for the claim period are known. This common process is called “paid loss development.”

Paid loss development is an extrapolation of actual dollars paid. It does not depend on case reserve estimates. A potential shortcoming of utilizing this method is that only a small fraction of total payments have been made for the most recent claim periods. Extrapolating ultimate losses based on small amounts of actual payments may be speculative. A second potential shortcoming is that payment patterns can change over time.

2. Developed Reported Incurred Losses. Reported incurred losses are paid losses plus case reserves. In most programs, total reported incurred losses underestimate the ultimate losses. Over time, as more information about a body of claims becomes known, they are adjusted either up or down until they are closed. Though many individual claims settle for less than what was estimated, these decreases are generally more than offset by increases in the cost of other claims for which new information has emerged.

The net effect is that total estimated costs are often revised upward over time. This normal process is called “reported incurred loss development.” Actuaries typically review the development patterns of the recent past to make projections of the expected future loss development and, therefore, estimations of ultimate losses.

3. Developed Case Reserves. A case reserve is an estimate of the unpaid amount established by claims adjusters for which a particular claim will ultimately be settled or adjudicated. The developed case reserves method is a hybrid of the paid loss development and reported incurred loss development methods. It relies on the historical adequacy of case reserves to predict ultimate losses. 19 4. Frequency Times Severity Analysis. The frequency times severity analysis is an actuarial method that uses a preliminary projection of ultimate losses to project claims severity. The claims severity times the number of claims is a predictor of ultimate losses. The focus of the frequency times severity analysis is that ultimate losses each period are dependent on the number of claims.

5. Loss Rate Analysis. The loss rate analysis is based on the historical loss rates per exposure unit (such as payroll, vehicles or property value). The loss rates (projected ultimate losses divided by exposure units) are trended to reflect the effect of claim cost inflation and retention changes. The trended loss rates represent the rates that one would see if all of the claims had been handled in the claim cost environment that will be present in the upcoming period. The trended loss rate times the projected exposure units is a predictor of losses.

6. Bornhuetter-Ferguson Method (B-F). The B-F method is an actuarial method that weights a preliminary projection of ultimate losses with projections of ultimate losses determined by other actuarial methods (usually the developed paid losses and developed reported incurred losses methods). For less mature claim periods, the B-F method leans more heavily to the preliminary projection. It gradually converges to the projections of ultimate losses determined by the other actuarial methods as the claim periods mature.

Actuary

A specialist trained in mathematics, statistics, and finance who is responsible for rate, reserve, and dividend calculations and other statistical studies.

Allocated Loss Adjustment Expenses

Allocated loss adjustment expenses (ALAE) are the direct expenses to settle specific claims.

These expenses are primarily legal expenses.

Governmental Accounting Standards Board (GASB) Statement No. 10 requires that ALAE be included in financial statements and that they be calculated by actuarial methods.

American Academy of Actuaries

A society concerned with the development of education in the field of actuarial science and with the enhancement of standards in the actuarial field. Members may use the designation MAAA (Member, American Academy of Actuaries).

Benefits

The financial reimbursement and other services provided insureds by insurers under the terms of an insurance contract. An example would be the benefits listed under a life or health insurance policy or benefits as prescribed by a workers compensation law.

20 Casualty Actuarial Society

A professional society for actuaries in areas of property and casualty insurance work. This society grants the designation of Associate of the Casualty Actuarial Society (ACAS) and Fellow of the Casualty Actuarial Society (FCAS).

Claim

Demand by an individual or entity to recover for a loss.

Claims Made

A policy written on this basis covers only those claims that are made during the policy period.

Coverage for prior acts is provided back to what is known as the retroactive date, which is the effective date of the original claims made policy with the same insurer.

Composite Rate

A single rate with a single basis of premium (e.g., payroll or sales). For this single rate the insured is covered for a variety of hazards, such as premises and operations, completed operations, products liability, and automobile. Its primary value is to compute premium simply.

Confidence Level

A confidence level is the statistical certainty that an actuary believes funding will be sufficient. For example, an 80% confidence level means that the actuary believes funding will be sufficient in eight years out of ten.

Confidence levels are determined based on mathematical models. Coverages that are low frequency and high severity (such as excess liability) are subject to greater risk than coverages that are high frequency and low severity (such as automobile physical damage).

Therefore, they need a greater margin to attain a given confidence level.

Coverage

The scope of the protection provided under a contract of insurance.

Credibility

Credibility is the belief that the sample data is an accurate reflection of the larger population.

Credibility is highest when the sample data is large and the standard deviation (discussed later) of the larger population is low.

21 Dates

There are at least three milestone dates in a claim. They are the date of injury or accident, the date of report and the date of closure. It is best if each of these dates is recorded. Some organizations may also keep the date a claim becomes a lawsuit, as opposed to a demand.

Aon recommends this additional level of detail, especially if the data is to be used for litigation management.

Deductible

The portion of an insured loss to be borne by the insured before he is entitled to recovery from the insurer. Deductibles may be expressed as a dollar amount, percentage or waiting period.

Disability

A condition that curtails a person’s ability to carry on his normal pursuits. A disability may be partial or total, and temporary or permanent.

Dividend (Policyholder)

The return of part of the premium paid for a policy issued on a participating basis by either a mutual or a stock insurer.

Estimated Outstanding Losses

Estimated outstanding losses are the cost of claims that have occurred but have not yet been paid. They typically include indemnification and allocated loss adjustment expenses (ALAE), but not unallocated loss adjustment expenses (ULAE).

Estimated outstanding losses are calculated as projected ultimate losses less paid losses.

Alternatively, they are the sum of case reserves and incurred but not reported (IBNR) claims.

Estimated outstanding losses are usually the largest single item listed as a liability on the balance sheet of a public entity’s financial statement. GASB Statement No. 10 requires they be calculated by actuarial methods. Other common names for estimated outstanding losses are outstanding claims liabilities and unpaid claims.

Experience Rating

A method of adjusting the premium for a risk based on past loss experience for that risk compared to loss experience for an average risk.

22 Exposure Data

Exposure data refers to the activities of the organization. For example, payroll is the most common exposure measure for workers compensation. Aon suggests collecting exposure data with the following characteristics:

 Readily Available. The exposure data should be easily obtained. It is best if it is a byproduct of other activities, although this is not always possible. If getting data is arduous, it may discourage collection.

 Vary With Losses. The exposure data should correlate directly with losses.

The ideal situation is where exposure and expected losses move in tandem.

The exposure base needs to be fitting to the coverage. For example, the number of employees may vary with property losses (more employees = more office space = more losses), but property value is a clearly superior exposure base for property losses.

Generally Accepted Accounting Principles (GAAP)

These principles are intended to produce financial results (in the insurance industry) consistent with those of other industries and to assure consistency in financial reporting.

Incurred But Not Reported

IBNR is really comprised of two distinct items. These are the development of known case reserves (incurred but not enough reported [IBNER] and incurred but not yet reported [IBNYR]).

IBNER are the actuary’s estimate of the inadequacy of case reserves. Most claims settle at amounts close to what is set by the claims administrator. Some claims close favorably and some emerge as more expensive. On balance, case reserves tend to be too low (especially for recent years). IBNER is the actuary’s estimate of the amount total case reserves will rise upon closure.

IBNYR refers to those claims that have occurred, but have not yet been reported. A classic example is medical malpractice claim reported several years after the medical procedure was performed.

Insurance Services Office (ISO)

An organization of the property and casualty insurance business designed to gather statistics, promulgate rates, and develop policy forms.

Investment Income

The return received by entities from their investment portfolios, including interest, dividends and realized capital gains on stocks. Realized capital gains means the profit realized on 23 assets that have actually been sold for more than their purchase price.

Limited

Most programs purchase excess insurance for catastrophic claims. For example, they may purchase coverage for claims above a $500,000 per occurrence self -insured retention. “Limited” refers to an estimate or projection being limited to the self -insured retention. In contrast, “unlimited” means a loss projection not limited to the self-insured retention.

Other common names for limited are net of excess insurance or capped losses.

Loss Development

The difference between the amount of losses initially estimated by the insurer and the amount reported in an evaluation on a later date. Loss development is typically measured for paid losses, reported incurred losses and claim counts.

Manual Rates

Usually, the published rate for some unit of insurance. An example is in the workers compensation manual, where the rates shown apply to each $100 of the payroll of the insured, $100 being the “unit.”

National Council on Compensation Insurance (NCCI)

An association of workers compensation insurance companies whose main functions are collecting statistics and calculating rates, establishing policy wording, developing experience and retrospective rating plans, and serving as the filing organization for member companies.

Net

Many pooling programs assign deductibles to members. For example, each member may have a $5,000 per claim deductible. “Net” refers to a loss estimate or projection that excludes amounts below member deductibles.

Occurrence

An event that results in an insured loss. In some lines of insurance, such as general liability, it is distinguished from accident in that the loss does not have to be sudden and fortuitous and can result from continuous or repeated exposure that results in bodily injury or property damage neither expected nor intended by the insured.

24 Pool

An organization of entities through which particular types of risks are written with the premiums, losses, and expenses shared in agreed amounts among the members belonging to the organization.

Premium

The price of insurance protection for a specified risk for a specified period of time.

Present Value

The amount of money that future amounts receivable are currently worth. For example, a Life Insurance policy may provide for payments to be made monthly for ten years. The present value of that money would be less than the total amount of the regular periodic payments for 10 years because of the amount of interest that a present lump sum could earn during the term than the payments otherwise would have been made.

Probability

The probability is the likelihood of an event. It is a measure of how likely a value or event is to occur. It can be measured from data by calculating the number of occurrences of the value or event divided by the total number of occurrences. This calculation can be converted to a percentage. For example, tossing a coin has a 50% probability of heads or tails.

Projected Losses Paid

Projected losses paid are the projected claims disbursements in a period, regardless of when the claim occurred. They typically include indemnification and ALAE, but not unallocated loss adjustment expenses (ULAE).

“Projected losses paid” is a cash- flow analysis that can be used in making investment decisions.

Projected Ultimate Losses

Projected ultimate losses are the accrual value of claims. They are the total amount that is expected to be paid in a particular claim period after all claims are closed. Projected ultimate losses are the total loss costs for a particular period. They typically include indemnification and ALAE, but not ULAE.

Other common names for projected ultimate losses are expected losses, ultimate losses and total losses.

25 Rate

The cost of a given unit of insurance. For example, in life insurance, it is the price of $1,000 of the face amount. In property insurance, it is the rate per $100 of value to be insured. The premium is the rate multiplied by the number of units of insurance purchased.

Retrospective Rating

A method for which the final premium is not determined until the end of the coverage period, and is based on the insured’s own loss experience for that same period. It is usually subject to a maximum and minimum premium. A plan of this type can be used in various types of insurance, especially workers compensation and liability, and is usually elected by only very large insureds.

Salvage

Property taken over by an entity to reduce its loss. Automobile physical damage losses can be reduced by the sale of recovered vehicles.

Schedule Rating

The application of debits or credits within established ranges for various characteristics of a risk according to an established schedule of items. Under liability and automobile insurance, the schedule rating plan allows credits and debits for various good or bad features of a particular commercial risk. An example in automobile schedule rating would be allowing credits for driver training classes or fleet maintenance programs.

Self-Insurance Retention (SIR)

That portion of a risk or potential loss assumed by an insured. It is often in the form of a per occurrence deductible.

Society of Actuaries (SOA)

A professional society for actuaries in areas of pensions, and life and health insurance work.

The SOA grants the designation Associate of the Society of Actuaries (ASA) and Fellow of the Society of Actuaries (FSA).

Standard Premium

Most often used in connect ion with retrospective rating for Workers Compensation and General Liability Insurance. It is the premium of which the basic premium is a percentage and is developed by applying the regular rates to an insured’s payroll.

26 State Fund

A fund set up by a s tate government to finance a mandatory insurance system, such as Workers Compensation or non- occupational disability benefits. Such a fund may be monopolistic, i.e., purchasers of the type of insurance required must place it in the state fund; or it may be competitive, i.e., an alternative to private insurance if the purchaser desires to use it.

Statutory Accounting Principles (SAP)

Those principles required by statute that must be followed by an insurance company or other similar entity when submitting its financial statement to the state insurance department. Such principles differ from (GAAP) in some important respects. For one thing SAP requires that expenses must be recorded immediately and cannot be deferred to track with premiums as they are earned and taken into revenue.

Unallocated Loss Adjustment Expenses

Unallocated loss adjustment expenses (ULAE) are the indirect expenses to settle claims.

These expenses are primarily administration and claims handling expenses.

GASB Statement No. 10 requires that ULAE be included in financial statements and that they be calculated by actuarial methods.
27 Appendix C

Exhibits

The attached exhibits detail our analysis.

28 CITY OF OAKLAND Exhibit WC-1 (page 1)

WORKERS' COMPENSATION
Data Summary as of June 30, 2022
Losses Limited to Self-Insured Retention
Claim
Period
Specific
Self-Insured
Retention
Aggregate
Retention
Months of
Development
6/30/22
Payroll
(000)
Reported
Claims
6/30/22
Open
Claims
6/30/22
Limited
Paid
Losses
6/30/22
Limited
Case
Reserves
6/30/22
Limited
Reported
Incurred
Losses
6/30/22
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
----------------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- --------------------- --------------------- --------------------- to 2002/03 See Note None 240.0 N ot Provided 27,845 113 $270,014,341 $5,675,583 $275,689,924 2003/04 Unlimited None 228.0 307,406 773 13 21,637,529 851,599 22,489,12 8 2004/05 1,000,000 None 216.0 315,491 675 15 17,084,326 593,560 17,677,88 6 2005/06 1,000,000 None 204.0 326,085 748 16 16,246,220 970,214 17,216,43 4 2006/07 1,000,000 None 192.0 354,814 703 7 14,919,370 326,149 15,245,519 2007/08 1,000,000 None 180.0 370,278 704 6 14,240,188 314,926 14,555,115 2008/09 750,000 None 168.0 377,769 678 12 16,847,638 484,784 17,332,422 2009/10 750,000 None 156.0 338,407 646 19 17,070,614 644,343 17,714,956 2010/11 750,000 None 144.0 338,298 650 21 20,243,012 1,102,679 21,345,69 2 2011/12 750,000 None 132.0 348,514 638 24 19,785,423 822,259 20,607,681 2012/13 750,000 None 120.0 355,748 569 22 15,001,468 1,076,109 16,077,57 8 2013/14 750,000 None 108.0 373,451 620 20 15,477,897 721,797 16,199,694 2014/15 750,000 None 96.0 364,737 560 24 12,212,554 984,249 13,196,803 2015/16 750,000 None 84.0 390,571 612 39 16,604,894 1,761,160 18,366,053 2016/17 750,000 None 72.0 Not Provi ded 555 59 16,036,649 2,723,606 18,76 0,255 2017/18 750,000 None 60.0 413,589 531 63 11,751,155 2,600,885 14,352,040 2018/19 750,000 None 48.0 376,038 560 67 10,640,135 2,806,699 13,446,835 2019/20 750,000 None 36.0 392,360 1,712 96 8,982,500 3,557,882 12,540,38 2 2020/21 750,000 None 24.0 402,318 1,660 147 9,910,898 5,674,146 15,585,0 44 2021/22 750,000 None 12.0 428,572 1,337 337 6,413,415 5,882,244 12,295,6 59 ----------------------- -------------------------------------------------------------------------------------------- -------------------- ----------------------- ----------------------- ----------------------- ----------------------- Total 42,776 1,120 $551,120,226 $39,574,874 $590,695,100 * The specific self-insured retention changes are as follows:

Effective Date Retention
----------------------------- -------------------
09/20/35 Unlimited
08/02/04 1,000,000
07/01/08 750,000
(8), (9) and (10) are net of the specific self-insured retention and other recoveries.

Data was provided by the City.

Oakland_WC_063022.xlsx
29 CITY OF OAKLAND Exhibit WC-1 (page 2)

WORKERS' COMPENSATION
Data Summary as of June 30, 2022
Net Unlimited Losses
Claim
Period
Specific
Self-Insured
Retention
Aggregate
Retention
Months of
Development
6/30/22
Payroll
(000)
Reported
Claims
6/30/22
Open
Claims
6/30/22
Net Unlimited
Paid
Losses
6/30/22
Net Unlimited
Case
Reserves
6/30/22
Net Unlimited
Reported
Incurred
Losses
6/30/22
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
----------------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- --------------------- --------------------- --------------------- to 2002/03 Unlimited None 240.0 N ot Provided 27,845 113 $270,014,341 $5,675,583 $275,689,924 2003/04 Unlimited None 228.0 307,406 773 13 21,637,529 851,599 22,489,12 8 2004/05 Unlimited None 216.0 315,491 675 15 17,084,326 3,030,700 20,115, 026 2005/06 Unlimited None 204.0 326,085 748 16 17,612,658 970,214 18,582,87 2 2006/07 Unlimited None 192.0 354,814 703 7 14,919,370 326,149 15,245,519 2007/08 Unlimited None 180.0 370,278 704 6 14,762,632 691,213 15,453,844 2008/09 Unlimited None 168.0 377,769 678 12 19,835,970 484,784 20,320,75 4 2009/10 Unlimited None 156.0 338,407 646 19 17,070,614 644,343 17,714,95 6 2010/11 Unlimited None 144.0 338,298 650 21 20,528,881 1,102,679 21,631, 560 2011/12 Unlimited None 132.0 348,514 638 24 19,785,423 822,259 20,607,68 1 2012/13 Unlimited None 120.0 355,748 569 22 15,001,468 1,076,109 16,077, 578 2013/14 Unlimited None 108.0 373,451 620 20 17,804,803 721,797 18,526,60 0 2014/15 Unlimited None 96.0 364, 737 560 24 12,212,554 984,249 13,196,803 2015/16 Unlimited None 84.0 390,571 612 39 16,655,927 1,761,160 18,417,0 87 2016/17 Unlimited None 72.0 Not P rovided 555 59 17,605,592 4,227,089 21,832,682 2017/18 Unlimited None 60.0 413,589 531 63 11,751,155 2,600,885 14,352,0 40 2018/19 Unlimited None 48.0 376, 038 560 67 13,938,890 12,405,903 26,344, 793 2019/20 Unlimited None 36.0 392,360 1,712 96 8,982,500 3,557,882 12,540, 382 2020/21 Unlimited None 24.0 402,318 1,660 147 9,910,898 5,674,146 15,585 ,044 2021/22 Unlimited None 12.0 428,572 1,337 337 6,413,415 5,882,244 12,295 ,659 ----------------------- ------------------------------------------------------------------------------------------------------------------------------------------ ----------------------- ----------------------- ----------------------- Total 42,776 1,120 $563,528,946 $53,490,987 $617,019,933 (8), (9) and (10) are gross of the specific self-insured retention and net of other recoveries.

Data was provided by the City.

Oakland_WC_063022.xlsx
30 CITY OF OAKLAND Exhibit WC-1 (page 3)

WORKERS' COMPENSATION
Data Summary as of June 30, 2022
Gross Unlimited Losses
Claim
Period
Specific
Self-Insured
Retention
Aggregate
Retention
Months of
Development
6/30/22
Payroll
(000)
Reported
Claims
6/30/22
Open
Claims
6/30/22
Gross Unlimited
Paid
Losses
6/30/22
Gross Unlimited
Case
Reserves
6/30/22
Gross Unlimited
Reported
Incurred
Losses
6/30/22
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
----------------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- --------------------- --------------------- --------------------- to 2002/03 Unlimited None 240.0 N ot Provided 27,845 113 $270,714,947 $5,675,583 $276,390,530 2003/04 Unlimited None 228.0 307,406 773 13 22,212,820 851,599 23,064,41 9 2004/05 Unlimited None 216.0 315,491 675 15 17,254,150 3,030,700 20,284, 851 2005/06 Unlimited None 204.0 326,085 748 16 17,716,489 970,214 18,686,70 3 2006/07 Unlimited None 192.0 354,814 703 7 15,039,087 326,149 15,365,236 2007/08 Unlimited None 180.0 370,278 704 6 14,945,764 691,213 15,636,977 2008/09 Unlimited None 168.0 377,769 678 12 20,109,621 484,784 20,594,40 5 2009/10 Unlimited None 156.0 338,407 646 19 17,356,506 644,343 18,000,84 9 2010/11 Unlimited None 144.0 338,298 650 21 20,557,748 1,102,679 21,660, 427 2011/12 Unlimited None 132.0 348,514 638 24 19,899,126 822,259 20,721,38 4 2012/13 Unlimited None 120.0 355,748 569 22 15,003,184 1,076,109 16,079, 293 2013/14 Unlimited None 108.0 373,451 620 20 17,812,703 721,797 18,534,50 0 2014/15 Unlimited None 96.0 364, 737 560 24 12,240,781 984,249 13,225,031 2015/16 Unlimited None 84.0 390,571 612 39 16,723,716 1,761,160 18,484,8 76 2016/17 Unlimited None 72.0 Not P rovided 555 59 17,659,315 4,227,089 21,886,404 2017/18 Unlimited None 60.0 413,589 531 63 11,783,872 2,600,885 14,384,7 56 2018/19 Unlimited None 48.0 376, 038 560 67 13,938,890 12,405,903 26,344, 793 2019/20 Unlimited None 36.0 392,360 1,712 96 8,982,231 3,559,407 12,541, 638 2020/21 Unlimited None 24.0 402,318 1,660 147 9,910,898 5,674,146 15,585 ,044 2021/22 Unlimited None 12.0 428,572 1,337 337 6,413,415 5,882,244 12,295 ,659 ----------------------- ------------------------------------------------------------------------------------------------------------------------------------------ ----------------------- ----------------------- ----------------------- Total 42,776 1,120 $566,275,264 $53,492,511 $619,767,776 (8), (9) and (10) are gross of the specific self-insured retention and other recoveries.

Data was provided by the City.

Oakland_WC_063022.xlsx
31 CITY OF OAKLAND Exhibit WC-2 (page 1)

WORKERS' COMPENSATION
Summary of Percent Losses Paid, Losses Reported and Claims Reported Months of
Development
Percent
Losses
Paid
Percent
Losses
Reported
Percent
Claims
Reported
Months of
Development
Percent
Losses
Paid
Percent
Losses
Reported
Percent
Claims
Reported
(1) (2) (3) (4) (5) (6) (7) (8)
------------------------ ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ 360.0 # 99.9% # 100.0% # 100.0% 360.0 99.9% 100.0% 100.0% 348.0 # 99.8% # 100.0% # 100.0% 348.0 99.8% 100.0% 100.0% 336.0 # 99.7% # 100.0% # 100.0% 336.0 99.7% 100.0% 100.0% 324.0 # 99.6% # 100.0% # 100.0% 324.0 99.6% 100.0% 100.0% 312.0 # 99.4% # 100.0% # 100.0% 312.0 99.4% 100.0% 100.0% 300.0 # 99.2% # 100.0% # 100.0% 300.0 99.2% 100.0% 100.0% 288.0 # 98.9% # 100.0% # 100.0% 288.0 98.9% 100.0% 100.0% 276.0 # 98.4% # 100.0% # 100.0% 276.0 98.4% 100.0% 100.0% 264.0 # 97.7% # 100.0% # 100.0% 264.0 97.7% 100.0% 100.0% 252.0 # 96.7% # 99.9% # 100.0% 252.0 96.7% 99.9% 100.0% 240.0 # 95.2% # 99.5% # 100.0% 240.0 95.2% 99.5% 100.0% 228.0 # 94.8% # 99.4% # 100.0% 228.0 94.8% 99.4% 100.0% 216.0 # 94.3% # 99.3% # 100.0% 216.0 94.3% 99.3% 100.0% 204.0 # 93.8% # 99.2% # 100.0% 204.0 93.8% 99.2% 100.0% 192.0 # 93.4% # 99.1% # 100.0% 192.0 93.4% 99.1% 100.0% 180.0 # 92.9% # 99.0% # 100.0% 180.0 92.9% 99.0% 100.0% 168.0 # 92.2% # 98.9% # 100.0% 168.0 92.2% 98.9% 100.0% 156.0 # 91.5% # 98.6% # 100.0% 156.0 91.5% 98.6% 100.0% 144.0 # 90.8% # 98.2% # 100.0% 144.0 90.8% 98.2% 100.0% 132.0 # 89.9% # 97.8% # 100.0% 132.0 89.9% 97.8% 100.0% 120.0 # 88.6% # 97.4% # 100.0% 120.0 88.6% 97.4% 100.0% 108.0 # 87.1% # 97.0% # 100.0% 108.0 87.1% 97.0% 100.0%

96.0 # 85.5% # 96.3% # 100.0% 96.0 85.5% 96.3% 100.0%

84.0 # 83.0% # 95.3% # 100.0% 84.0 83.0% 95.3% 100.0%

72.0 # 80.1% # 94.1% # 100.0% 72.0 80.1% 94.1% 100.0%

60.0 # 76.0% # 92.4% # 100.0% 60.0 76.0% 92.4% 100.0%

48.0 # 67.4% # 89.7% # 100.0% 48.0 67.4% 89.7% 100.0%

36.0 # 54.7% # 84.0% # 99.6% 36.0 54.7% 84.0% 99.6%

24.0 # 37.5% # 71.6% # 99.1% 24.0 37.5% 71.6% 99.1%

12.0 16.5% 41.9% 95.8% 12.0 16.5% 41.9% 95.8%
(2) is from
Exhibit WC-2 (page 2).
(3) is from Exhibit WC-2 (page 3).
(4) is from Exhibit WC-2 (page 4).
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
240 228 216 204 192 180 168 156 144 132 120 108 96 84 72 60 48 36 24 12 Month of Development
Percent
Losses
Paid
Percent
Losses
Reported
Percent
Claims
Reported
Oakland_WC_063022.xlsx
32 CITY OF OAKLAND Exhibit WC-2 (page 2)

WORKERS' COMPENSATION
Historical Limited Paid Losses ($000) and Limited Paid Loss Dev elopment I. Historical Limited Paid Losses ($000)
Claim Months of Development:

Period 12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 192 204 216 228 240 -------------------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- to 2002/03
2003/04 15,966 16,776 17,253 18,274 18,603 19,046 19,578 19,834 20,116 20,222 20,566 20,980 21,259 21,486 21,638 2004/05 11,109 12,288 13,255 14,081 14,562 15,529 15,627 15,961 16,191 16,539 16,702 16,886 17,050 17,003 17,084 2005/06 9,239 10,733 11,925 12,719 13,209 13,887 14,276 15,170 15,448 15,742 15,878 15,985 16,102 16,177 16,246 2006/07 7,705 10,428 12,123 12,969 13,467 13,788 14,031 14,145 14,375 14,459 14,544 14,660 14,851 14,907 14,919 2007/08 3,274 6,798 9,061 10,643 11,516 12,147 12,662 13,281 13,573 13,800 13,968 14,017 14,051 14,143 14,240 2008/09 3,500 8,732 11,787 13,716 14,403 14,960 15,523 15,776 15,958 16,538 16,609 16,656 16,784 16,848 2009/10 3,877 9,024 12,032 13,699 15,065 15,655 16,040 16,538 16,640 16,829 16,939 17,024 17,071 2010/11 4,975 10,288 13,545 16,083 17,050 18,197 18,956 19,410 19,608 19,782 19,955 20,243 2011/12 2,977 10,326 14,196 16,388 17,323 18,141 18,804 19,258 19,526 19,684 19,785 2012/13 2,401 6,100 8,993 10,823 12,447 13,342 13,752 14,472 14,753 15,00 1 2013/14 2,368 6,551 9,474 11,631 13,379 14,335 14,905 15,337 15,478 2014/15 2,240 5,593 8,020 9,489 10,535 11,287 11,891 12,213 2015/16 2,798 7,556 11,276 13,858 15,457 16,040 16,605
2016/17 3,866 8,139 11,111 13,475 15,208 16,037
2017/18 2,557 5,631 8,367 10,336 11,751
2018/19 2,966 5,964 8,498 10,640
2019/20 2,441 6,144 8,982
2020/21 3,733 9,911
2021/22 6,413
II. Limited Paid Loss Development
Claim Months of Development:

Period 12-24 24-36 36-48 48-60 60-72 72-84 84-96 96-108 108-120 120-132 132-144 144-156 156-168 168-180 180-192 192-204 204-216 216-228 228-240 24 0-Ult -------------------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- to 2002/03
2003/04 1.051 1.028 1.059 1.018 1.024 1.028 1.013 1.014 1.005 1.017 1.020 1.013 1.011 1.007 2004/05 1.106 1.079 1.062 1.034 1.066 1.006 1.021 1.014 1.021 1.010 1.011 1.010 0.997 1.005 2005/06 1.162 1.111 1.067 1.039 1.051 1.028 1.063 1.018 1.019 1.009 1.007 1.007 1.005 1.004 2006/07 1.353 1.163 1.070 1.038 1.024 1.018 1.008 1.016 1.006 1.006 1.008 1.013 1.004 1.001 2007/08 2.077 1.333 1.175 1.082 1.055 1.042 1.049 1.022 1.017 1.012 1.004 1.002 1.007 1.007 2008/09 2.495 1.350 1.164 1.050 1.039 1.038 1.016 1.012 1.036 1.004 1.003 1.008 1.004 2009/10 2.327 1.333 1.139 1.100 1.039 1.025 1.031 1.006 1.011 1.007 1.005 1.003 2010/11 2.068 1.317 1.187 1.060 1.067 1.042 1.024 1.010 1.009 1.009 1.014 2011/12 3.469 1.375 1.154 1.057 1.047 1.037 1.024 1.014 1.008 1.005 2012/13 2.541 1.474 1.203 1.150 1.072 1.031 1.052 1.019 1.017 2013/14 2.767 1.446 1.228 1.150 1.071 1.040 1.029 1.009 2014/15 2.497 1.434 1.183 1.110 1.071 1.053 1.027
2015/16 2.700 1.492 1.229 1.115 1.038 1.035
2016/17 2.105 1.365 1.213 1.129 1.054
2017/18 2.202 1.486 1.235 1.137
2018/19 2.011 1.425 1.252
2019/20 2.517 1.462
2020/21 2.655
2021/22
Average
All 2.459 1.403 1.192 1.102 1.056 1.038 1.035 1.019 1.021 1.012 1.010 1.009 1.008 1.009 1.009 1.005 1.008 1.007 Wtd 3 2.409 1.457 1.231 1.126 1.053 1.042 1.036 1.014 1.011 1.007 1.008 1.004 1.008 1.006 1.005 1.006 Last 3 2.394 1.458 1.233 1.127 1.055 1.043 1.036 1.014 1.011 1.007 1.007 1.004 1.008 1.006 1.005 1.005 Last 5 2.275 1.458 1.226 1.127 1.066 1.037 1.027 1.011 1.012 1.007 1.005 1.006 1.008 1.008 x-hi,low
Similar 2.660 1.439 1.191 1.093 1.056 1.036 1.030 1.024 1.022 1.019 1.016 1.014 1.014 1.012 1.011 1.009 1.009 1.008 1.109 Previous 2.450 1.450 1.220 1.110 1.065 1.037 1.030 1.022 1.022 1.017 1.014 1.013 1.010 1.010 1.006 1.006 1.005 1.005 1.005 1.085 Selected 2.275 1.460 1.233 1.127 1.054 1.037 1.029 1.019 1.017 1.015 1.010 1.008 1.008 1.007 1.005 1.005 1.005 1.005 1.005 1.050 Cumulative 6.074 2.670 1.829 1.483 1.316 1.249 1.204 1.170 1.148 1.129 1.112 1.101 1.093 1.084 1.077 1.071 1.066 1.061 1.055 1.050 Percent 16.5% 37.5% 54.7% 67.4% 76.0% 80.1% 83.0% 85.5% 87.1% 88.6% 89.9% 90.8% 91.5% 92.2% 92.9% 93.4% 93.8% 94.3% 94.8% 95.2% Amounts are limited (net of excess insurance).

Data was provided by the City.

Oakland_WC_063022.xlsx
33 Exhibit WC-2 (page 3)CITY OF OAKLAND

WORKERS' COMPENSATION
Historical Limited Reported Incurred Losses ($000) and Limited Reported Incurred Loss Development I. Historical Limited Reported Incurred Losses ($000)
Claim Months of Development:

Period 12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 192 204 216 228 240 -------------------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- to 2002/03
2003/04 18,973 18,991 19,153 19,790 20,472 20,531 21,219 21,397 21,566 21,443 21,748 22,124 22,407 22,442 22,489 14,940 14,940 16,266 16,963 17,540 18,362 18,405 18,550 18,705 18,629 18,256 18,311 18,235 17,612 17,678 13,636 13,940 14,760 15,366 15,996 16,186 16,806 17,020 17,344 17,151 17,710 17,384 17,416 17,175 17,216 12,182 13,503 14,335 14,489 14,947 14,660 14,772 14,904 15,252 15,052 14,935 15,089 15,440 15,321 15,246 8,126 10,793 12,889 14,266 14,228 14,126 14,723 15,079 15,246 15,205 15,344 14,748 14,621 14,626 14,555 7,312 13,225 16,845 17,497 17,101 17,372 17,328 18,010 18,072 17,486 17,307 17,129 17,285 17,332 8,727 15,621 17,474 17,349 17,587 17,768 18,240 18,186 18,165 17,812 17,572 17,585 17,715 11,395 17,821 18,656 20,235 20,504 21,515 21,356 21,318 21,464 21,053 21,207 21,346 9,353 17,335 19,494 21,503 22,167 21,392 21,233 20,891 20,711 20,674 20,608 5,495 10,353 13,970 17,381 16,461 17,021 16,484 15,909 16,068 16,078 5,431 11,242 16,389 16,585 16,874 16,715 16,240 16,310 16,200 6,785 11,750 12,680 13,471 13,698 13,104 13,061 13,197
10,563 14,766 16,876 17,788 18,098 18,309 18,366
8,774 14,167 16,343 17,878 18,434 18,760
6,025 10,385 12,624 13,566 14,352
6,368 10,907 12,804 13,447
5,852 10,681 12,540
9,304 15,585
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22 12,296
II. Limited Reported Incurred Loss Development
Claim Months of Development:
36-48Period 12-24 24-36 48-60 60-72 72-84 84-96 96-108 108-120 120-132 132-144 144-156 156-168 168-180 180-192 192-204 204-216 216-228 228-240 240-Ult -------------------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- to 2002/03
2003/04 1.001 1.009 1.033 1.034 1.003 1.034 1.008 1.008 0.994 1.014 1.017 1.013 1.002 1.002

1.000 1.089 1.043 1.034 1.047 1.002 1.008 1.008 0.996 0.980 1.003 0.996 0.966 1.004

1.022 1.059 1.041 1.041 1.012 1.038 1.013 1.019 0.989 1.033 0.982 1.002 0.986 1.002

1.108 1.062 1.011 1.032 0.981 1.008 1.009 1.023 0.987 0.992 1.010 1.023 0.992 0.995

1.328 1.194 1.107 0.997 0.993 1.042 1.024 1.011 0.997 1.009 0.961 0.991 1.000 0.995

1.809 1.274 1.039 0.977 1.016 0.997 1.039 1.003 0.968 0.990 0.990 1.009 1.003

1.790 1.119 0.993 1.014 1.010 1.027 0.997 0.999 0.981 0.987 1.001 1.007

1.564 1.047 1.085 1.013 1.049 0.993 0.998 1.007 0.981 1.007 1.007

1.853 1.125 1.103 1.031 0.965 0.993 0.984 0.991 0.998 0.997

1.884 1.349 1.244 0.947 1.034 0.968 0.965 1.010 1.001

2.070 1.458 1.012 1.017 0.991 0.972 1.004 0.993

1.732 1.079 1.062 1.017 0.957 0.997 1.010

1.398 1.143 1.054 1.017 1.012 1.003

1.615 1.154 1.094 1.031 1.018

1.724 1.216 1.075 1.058

1.713 1.174 1.050

1.825 1.174

1.675
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22
Average
All 1.713 1.187 1.072 1.014 1.015 1.005 1.009 1.013 0.997 1.004 0.995 1.008 0.997 1.001 0.999 0.994 1.003 1.002 Wtd 3 1.727 1.188 1.075 1.034 0.999 0.990 0.992 0.998 0.992 0.997 1.000 1.003 1.009 0.997 0.992 0.995 Last 3 1.738 1.188 1.073 1.035 0.995 0.990 0.993 0.998 0.993 0.997 0.999 1.003 1.009 0.996 0.992 0.994 Last 5 1.704 1.167 1.064 1.022 1.007 0.987 0.995 1.000 0.987 0.998 0.994 1.009 0.995 1.000 x-hi,low
Similar 1.667 1.164 1.068 1.038 1.022 1.013 1.009 1.009 1.008 1.006 1.004 1.004 1.000 1.001 1.001 1.000 1.001 1.000 1.006 Previous 1.725 1.160 1.080 1.029 1.027 1.025 1.020 1.020 1.015 1.010 1.008 1.007 1.005 1.004 1.004 1.003 1.002 1.002 1.002 1.005 Selected 1.710 1.174 1.067 1.031 1.018 1.013 1.010 1.007 1.005 1.004 1.004 1.004 1.003 1.001 1.001 1.001 1.001 1.001 1.001 1.005 Cumulative 2.389 1.397 1.190 1.115 1.082 1.063 1.049 1.039 1.031 1.026 1.022 1.018 1.014 1.011 1.010 1.009 1.008 1.007 1.006 1.005 Percent 41.9% 71.6% 84.0% 89.7% 92.4% 94.1% 95.3% 96.3% 97.0% 97.4% 97.8% 98.2% 98.6% 98.9% 99.0% 99.1% 99.2% 99.3% 99.4% 99.5% Amounts are limited (net of excess insurance).

Data was provided by the City.

Oakland_WC_063022.xlsx
34 Exhibit WC-2 (page 4)CITY OF OAKLAND

WORKERS' COMPENSATION
Historical Reported Claims and Reported Claim Development I. Historical R eported Claims
Claim Months of Development:

Period 12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 192 204 216 228 240 -------------------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- to 2002/03
2003/04 771 771 771 767 769 774 769 774 773 773 773 773 773 773 773 670 672 674 671 671 674 672 675 675 675 675 675 675 675 675 740 742 747 740 740 748 740 748 749 749 748 748 748 748 748 696 701 703 700 700 703 700 703 703 703 703 703 703 703 703 669 702 702 694 694 702 694 702 703 703 704 704 704 704 704 637 674 672 673 677 674 678 678 678 678 678 678 678 678 605 615 618 642 619 642 642 645 646 646 646 646 646
576 615 645 625 649 650 650 650 650 650 650 650
548 629 593 636 636 637 637 637 637 638 638
515 560 566 568 569 569 569 569 569 569
587 618 620 621 621 621 621 620 620
526 553 555 559 559 559 560 560
571 607 610 611 611 612 612
525 543 545 548 554 555
496 522 527 531 531
537 556 559 560
1,654 1,707 1,712
1,635 1,660
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22 1,337
II. Reported Claim Development
Claim Months of Development:
36-48Period 12-24 24-36 48-60 60-72 72-84 84-96 96-108 108-120 120-132 132-144 144-156 156-168 168-180 180-192 192-204 204-216 216-228 228-240 240-Ult -------------------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- to 2002/03
2003/04 1.000 1.000 0.995 1.003 1.007 0.994 1.007 0.999 1.000 1.000 1.000 1.000 1.000 1.000

1.003 1.003 0.996 1.000 1.004 0.997 1.004 1.000 1.000 1.000 1.000 1.000 1.000 1.000

1.003 1.007 0.991 1.000 1.011 0.989 1.011 1.001 1.000 0.999 1.000 1.000 1.000 1.000

1.007 1.003 0.996 1.000 1.004 0.996 1.004 1.000 1.000 1.000 1.000 1.000 1.000 1.000

1.049 1.000 0.989 1.000 1.012 0.989 1.012 1.001 1.000 1.001 1.000 1.000 1.000 1.000

1.058 0.997 1.001 1.006 0.996 1.006 1.000 1.000 1.000 1.000 1.000 1.000 1.000

1.017 1.005 1.039 0.964 1.037 1.000 1.005 1.002 1.000 1.000 1.000 1.000

1.068 1.049 0.969 1.038 1.002 1.000 1.000 1.000 1.000 1.000 1.000

1.148 0.943 1.073 1.000 1.002 1.000 1.000 1.000 1.002 1.000

1.087 1.011 1.004 1.002 1.000 1.000 1.000 1.000 1.000

1.053 1.003 1.002 1.000 1.000 1.000 0.998 1.000

1.051 1.004 1.007 1.000 1.000 1.002 1.000

1.063 1.005 1.002 1.000 1.002 1.000

1.034 1.004 1.006 1.011 1.002

1.052 1.010 1.008 1.000

1.035 1.005 1.002

1.032 1.003

1.015
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22
Average
All 1.055 1.003 1.007 1.002 1.003 1.000 1.001 1.000 1.002 1.000 1.001 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Wtd 3 1.025 1.005 1.005 1.004 1.001 1.001 0.999 1.000 1.001 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Last 3 1.028 1.006 1.005 1.004 1.001 1.001 0.999 1.000 1.001 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Last 5 1.034 1.005 1.005 1.000 1.001 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 x-hi,low
Similar 1.131 1.019 1.010 1.007 1.007 1.005 1.005 1.006 1.006 1.001 1.001 1.001 1.001 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Previous 1.050 1.005 1.004 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Selected 1.034 1.005 1.004 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Cumulative 1.043 1.009 1.004 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Percent 95.8% 99.1% 99.6% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Data was provided by the City.

Oakland_WC_063022.xlsx
35 CITY OF OAKLAND Exhibit WC-2 (page 5)

WORKERS' COMPENSATION
Historical Ratio of Limited Paid Losses and Limited Reported Incurred Losses Claim Months of Development:

Period 12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 192 204 216 228 240 -------------------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- to 2002/03
2003/04 84.1% 88.3% 90.1% 92.3% 90.9% 92.8% 92.3% 92.7% 93.3% 94.3% 94.6% 94.8% 94.9% 95.7% 96.2% 2004/05 74.4% 82.2% 81.5% 83.0% 83.0% 84.6% 84.9% 86.0% 86.6% 88.8% 91.5% 92.2% 93.5% 96.5% 96.6% 2005/06 67.8% 77.0% 80.8% 82.8% 82.6% 85.8% 84.9% 89.1% 89.1% 91.8% 89.7% 92.0% 92.5% 94.2% 94.4% 2006/07 63.2% 77.2% 84.6% 89.5% 90.1% 94.1% 95.0% 94.9% 94.3% 96.1% 97.4% 97.2% 96.2% 97.3% 97.9% 2007/08 40.3% 63.0% 70.3% 74.6% 80.9% 86.0% 86.0% 88.1% 89.0% 90.8% 91.0% 95.0% 96.1% 96.7% 97.8% 2008/09 47.9% 66.0% 70.0% 78.4% 84.2% 86.1% 89.6% 87.6% 88.3% 94.6% 96.0% 97.2% 97.1% 97.2% 2009/10 44.4% 57.8% 68.9% 79.0% 85.7% 88.1% 87.9% 90.9% 91.6% 94.5% 96.4% 96.8% 96.4% 2010/11 43.7% 57.7% 72.6% 79.5% 83.2% 84.6% 88.8% 91.1% 91.4% 94.0% 94.1% 94.8% 2011/12 31.8% 59.6% 72.8% 76.2% 78.1% 84.8% 88.6% 92.2% 94.3% 95.2% 96.0% 2012/13 43.7% 58.9% 64.4% 62.3% 75.6% 78.4% 83.4% 91.0% 91.8% 93.3% 2013/14 43.6% 58.3% 57.8% 70.1% 79.3% 85.8% 91.8% 94.0% 95.5% 2014/15 33.0% 47.6% 63.3% 70.4% 76.9% 86.1% 91.0% 92.5% 2015/16 26.5% 51.2% 66.8% 77.9% 85.4% 87.6% 90.4%
2016/17 44.1% 57.4% 68.0% 75.4% 82.5% 85.5%
2017/18 42.4% 54.2% 66.3% 76.2% 81.9%
2018/19 46.6% 54.7% 66.4% 79.1%
2019/20 41.7% 57.5% 71.6%
2020/21 40.1% 63.6%
2021/22 52.2%
Average
All 41.5% 58.1% 68.3% 75.7% 82.0% 85.4% 88.2% 90.3% 90.7% 92.3% 93.0% 94.0% 94.1% 94.6% 94.9% 95.1% 95.3% 96.2% 96.2% Last 3 44.7% 58.6% 68.1% 76.9% 83.3% 86.4% 91.1% 92.5% 93.9% 94.2% 95.5% 96.3% 96.5% 96.7% 95.9% 95.2% 95.3% Last 5 43.6% 56.6% 67.1% 76.5% 81.2% 85.8% 90.0% 91.9% 92.6% 94.3% 95.4% 96.4% 96.5% 94.9% 94.8% x-hi,low
Implicit 39.3% 52.3% 65.1% 75.2% 82.2% 85.1% 87.1% 88.8% 89.8% 90.9% 91.9% 92.4% 92.8% 93.3% 93.8% 94.2% 94.6% 95.0% 95.3% 95.7% Oakland_WC_063022.xlsx
36 CITY OF OAKLAND Exhibit WC-3

WORKERS' COMPENSATION
Developed Limited Paid Losses
Claim
Period
Months of
Development
6/30/22
Limited
Paid
Losses
6/30/22
Percent
Losses
Paid
Developed
Limited
Paid
Losses
(3)/(4)
(1) (2) (3) (4) (5)
-------------------------- ------------------------ ------------------------ ------------------------ ------------------------ to 2002/03 240.0 $270,014,341 95.2% $283,515,058
2003/04 228.0 21,637,529 94.8% 22,833,003
2004/05 216.0 17,084,326 94.3% 18,118,376
2005/06 204.0 16,246,220 93.8% 17,249,861 *
2006/07 192.0 14,919,370 93.4% 15,981,003
2007/08 180.0 14,240,188 92.9% 15,253,245 *
2008/09 168.0 16,847,638 92.2% 18,200,635 *
2009/10 156.0 17,070,614 91.5% 18,653,432
2010/11 144.0 20,243,012 90.8% 22,220,843 *
2011/12 132.0 19,785,423 89.9% 22,010,852
2012/13 120.0 15,001,468 88.6% 16,939,139
2013/14 108.0 15,477,897 87.1% 17,662,945 *
2014/15 96.0 12,212,554 85.5% 14,290,887
2015/16 84.0 16,604,894 83.0% 19,841,120 *
2016/17 72.0 16,036,649 80.1% 19,651,442 *
2017/18 60.0 11,751,155 76.0% 15,465,644
2018/19 48.0 10,640,135 67.4% 15,419,442 *
2019/20 36.0 8,982,500 54.7% 16,427,507
2020/21 24.0 9,910,898 37.5% 26,463,074
2021/22 12.0 6,413,415 16.5% 38,958,125
----------------------- ----------------------- ----------------------- ----------------------- ----------------------- Total $551,120,226 $655,155,633
* - Indicates large claim(s) limited to retention. For details, see Exhibit WC-15. (3) is from Exhibit WC-1.
(4) is from Exhibit WC-2.

Oakland_WC_063022.xlsx
37 CITY OF OAKLAND Exhibit WC-4

WORKERS' COMPENSATION
Developed Limited Reported Incurred Losses
Claim
Period
Months of
Development
6/30/22
Limited
Reported
Incurred
Losses
6/30/22
Percent
Losses
Reported
Developed
Limited
Reported
Incurred
Losses
(3)/(4)
(1) (2) (3) (4) (5)
-------------------------- ------------------------ ------------------------ ------------------------ ------------------------ to 2002/03 240.0 $275,689,924 99.5% $277,068,374
2003/04 228.0 22,489,128 99.4% 22,624,175
2004/05 216.0 17,677,886 99.3% 17,794,815 *
2005/06 204.0 17,216,434 99.2% 17,346,457 *
2006/07 192.0 15,245,519 99.1% 15,383,125
2007/08 180.0 14,555,115 99.0% 14,691,141 *
2008/09 168.0 17,332,422 98.9% 17,515,576 *
2009/10 156.0 17,714,956 98.6% 17,964,352
2010/11 144.0 21,345,692 98.2% 21,719,185 *
2011/12 132.0 20,607,681 97.8% 21,065,318
2012/13 120.0 16,077,578 97.4% 16,500,352
2013/14 108.0 16,199,694 97.0% 16,685,238 *
2014/15 96.0 13,196,803 96.3% 13,706,825
2015/16 84.0 18,366,053 95.3% 19,229,836 *
2016/17 72.0 18,760,255 94.1% 19,841,978 *
2017/18 60.0 14,352,040 92.4% 15,526,028
2018/19 48.0 13,446,835 89.7% 14,911,226 *
2019/20 36.0 12,540,382 84.0% 14,923,840
2020/21 24.0 15,585,044 71.6% 21,774,387
2021/22 12.0 12,295,659 41.9% 29,375,539
----------------------- ----------------------- ----------------------- ----------------------- ----------------------- Total $590,695,100 $625,647,767
* - Indicates large claim(s) limited to retention. For details, see Exhibit WC-15. (3) is from Exhibit WC-1.
(4) is from Exhibit WC-2.

Oakland_WC_063022.xlsx
38 CITY OF OAKLAND Exhibit WC-5

WORKERS' COMPENSATION
Developed Limited Case Reserves
Claim
Period
Months of
Development
6/30/22
Percent
Losses
Paid
Percent
Losses
Reported
Percent
Losses
Reserved
6/30/22
[(4)-(3)]/
[100.0%-(3)]
Limited
Paid
Losses
6/30/22
Limited
Case
Reserves
6/30/22
Developed
Limited
Case
Reserves
(6)+(7)/(5)
(1) (2) (3) (4) (5) (6) (7) (8)
------------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- to 2002/03 240.0 95.2% 99.5% 89.6% $270,014,341 $5,675,583 $276,352,075 2003/04 228.0 94.8% 99.4% 88.6% 21,637,529 851,599 22,598,711 2004/05 216.0 94.3% 99.3% 87.8% 17,084,326 593,560 17,740,308 * 2005/06 204.0 93.8% 99.2% 87.1% 16,246,220 970,214 17,359,855 2006/07 192.0 93.4% 99.1% 86.5% 14,919,370 326,149 15,296,271 2007/08 180.0 92.9% 99.0% 86.0% 14,240,188 314,926 14,606,291 2008/09 168.0 92.2% 98.9% 85.9% 16,847,638 484,784 17,411,931 2009/10 156.0 91.5% 98.6% 83.6% 17,070,614 644,343 17,840,997 2010/11 144.0 90.8% 98.2% 80.7% 20,243,012 1,102,679 21,529,056 * 2011/12 132.0 89.9% 97.8% 78.5% 19,785,423 822,259 20,832,713 2012/13 120.0 88.6% 97.4% 77.6% 15,001,468 1,076,109 16,388,188 2013/14 108.0 87.1% 97.0% 76.4% 15,477,897 721,797 16,422,467 2014/15 96.0 85.5% 96.3% 74.4% 12,212,554 984,249 13,535,214 2015/16 84.0 83.0% 95.3% 72.4% 16,604,894 1,761,160 19,036,560 2016/17 72.0 80.1% 94.1% 70.4% 16,036,649 2,723,606 19,906,179 2017/18 60.0 76.0% 92.4% 68.5% 11,751,155 2,600,885 15,547,110 2018/19 48.0 67.4% 89.7% 68.3% 10,640,135 2,806,699 14,751,904 2019/20 36.0 54.7% 84.0% 64.8% 8,982,500 3,557,882 14,476,433 2020/21 24.0 37.5% 71.6% 54.6% 9,910,898 5,674,146 20,311,633 2021/22 12.0 16.5% 41.9% 30.4% 6,413,415 5,882,244 25,763,653 ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- Total $551,120,226 $39,574,874 $617,707,547
* - Indicates large claim(s) limited to retention. For details, see Exhibit WC-15. (3) and (4) are from Exhibit WC-2.
(6) and (7) are from Exhibit WC-1.

Oakland_WC_063022.xlsx
39 CITY OF OAKLAND Exhibit WC-6

WORKERS' COMPENSATION
Preliminary Projected Ultimate Limited Losses to 2021/22 Claim
Period
Developed
Limited
Paid
Losses
Developed
Limited
Reported
Incurred
Losses
Developed
Limited
Case
Reserves
Preliminary
Projected
Ultimate
Limited
Losses
(1) (2) (3) (4) (5)
-------------------------- ------------------------ ------------------------ ------------------------ ------------------------ to 2002/03 # $283,515,058 $277,068,374 $276,352,075 # $276,352,075 2003/04 # 22,833,003 22,624,175 22,598,711 # 22,598,711 2004/05 # 18,118,376 17,794,815 17,740,308 # 17,740,308 2005/06 # 17,249,861 17,346,457 17,359,855 # 17,359,855 2006/07 # 15,981,003 15,383,125 15,296,271 # 15,296,271 2007/08 # 15,253,245 14,691,141 14,606,291 # 14,606,291 2008/09 # 18,200,635 17,515,576 17,411,931 # 17,411,931 2009/10 # 18,653,432 17,964,352 17,840,997 # 17,840,997 2010/11 # 22,220,843 21,719,185 21,529,056 # 21,529,056 2011/12 # 22,010,852 21,065,318 20,832,713 # 20,832,713 2012/13 # 16,939,139 16,500,352 16,388,188 # 16,388,188 2013/14 9 17,662,945 16,685,238 16,422,467 9 16,422,467 2014/15 8 14,290,887 13,706,825 13,535,214 8 13,552,375 2015/16 7 19,841,120 19,229,836 19,036,560 7 19,075,215 2016/17 6 19,651,442 19,841,978 19,906,179 6 19,886,919 2017/18 5 15,465,644 15,526,028 15,547,110 5 15,538,677 2018/19 4 15,419,442 14,911,226 14,751,904 4 14,882,387 2019/20 3 16,427,507 14,923,840 14,476,433 3 15,045,610 2020/21 2 26,463,074 21,774,387 20,311,633 2 22,127,023 2021/22 1 38,958,125 29,375,539 25,763,653 1 28,166,666 ----------------------- 0 ----------------------- ----------------------- ----------------------- 0 ----------------------- Total 0 $655,155,633 $625,647,767 $617,707,547 0 $622,653,732 00 00
00 00
00 00
00 00
(2) is
from Exhibit WC-3.
(3) is from Exhibit WC-4.
(4) is from Exhibit WC-5.
(5) is based on (2) to (4) and actuarial judgment.

Oakland_WC_063022.xlsx
40 CITY OF OAKLAND Exhibit WC-7

WORKERS' COMPENSATION
Bornhuetter - Ferguson Analysis
I. A-priori Loss Rate
Claim
Period
Preliminary
Projected
Ultimate
Limited
Losses
Payroll
(000)
Limited
Loss Rate
per $100 of
Payroll
(2)/(3)/10
Loss Rate
Trend
(2022/23
= 1.000)
Trended
Limited
Loss Rate
per $100 of
Payroll
(4)X(5)
Projected
A-priori
Loss Rate
per $100 of
Payroll
(7)/(5)
(1) (2) (3) (4) (5) (6) (8)
---------------------------- ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ 2012/13 # $16,388,188 $355,748 $4.61 1.114 $5.13 $4.77
2013/14 9 16,422,467 373,451 4.40 1.096 4.82 4.84
2014/15 8 13,552,375 364,737 3.72 1.078 4.01 4.92
2015/16 7 19,075,215 390,571 4.88 1.066 5.21 4.98
2016/17 6 19,886,919 401,986 4.95 1.059 5.24 5.01
2017/18 5 15,538,677 413,589 3.76 1.054 3.96 5.04
2018/19 4 14,882,387 376,038 3.96 1.045 4.14 5.08
2019/20 3 15,045,610 392,360 3.83 1.033 3.96 5.14
2020/21 2 22,127,023 402,318 5.50 1.021 5.62 5.20
2021/22 1 28,166,666 428,572 6.57 1.010 6.64 5.26
(7) Projected 2022/23 a-priori loss rate per $100 of Payroll $5.31 II. Bornhuetter - Ferguson Analysis Based on Limited Paid Losses Claim
Period
Limited
Paid
Losses
6/30/22
Percent
Losses
Paid
Projected
A-priori
Loss Rate
per $100 of
Payroll
Payroll
(000)
B-F
Unpaid
Losses
[100.0%-(3)]
X(4)X(5)X10
B-F
Ul
timate
Limited
Paid
Losses
(2)+(6)
(1) (2) (3) (4) (5) (6) (7)
---------------------------- ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ 2017/18 # $11,751,155 76.0% $5.04 $413,589 $5,002,537 $16,753,692 2018/19 # 10,640,135 67.4% 5.08 376,038 6,225,206 16,865,341 2019/20 # 8,982,500 54.7% 5.14 392,360 9,139,036 18,121,536 2020/21 # 9,910,898 37.5% 5.20 402,318 13,086,681 22,997,579 2021/22 # 6,413,415 16.5% 5.26 428,572 18,821,977 25,235,393 III. Bornhuetter - Ferguson Analysis Based on Limited Reported Incurred Losses Claim
Period
Limited
Reported
Incurred
Losses
6/30/22
Percent
Losses
Reported
Projected
A-priori
Loss Rate
per $100 of
Payroll
Payroll
(000)
B-F
Unreported
Losses
[100.0%-(3)]
X(4)X(5)X10
B-F
Ultimate
Limited
Reported
Losses
(2)+(6)
(1) (2) (3) (4) (5) (6) (7)
---------------------------- ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ 2017/18 # $14,352,040 92.4% $5.04 $413,589 $1,574,935 $15,926,975 2018/19 # 13,446,835 89.7% 5.08 376,038 1,975,872 15,422,706 2019/20 # 12,540,382 84.0% 5.14 392,360 3,220,578 15,760,960 2020/21 # 15,585,044 71.6% 5.20 402,318 5,947,211 21,532,255 2021/22 # 12,295,659 41.9% 5.26 428,572 13,100,318 25,395,978 Section I, (2) is from Exhibit WC-6.

Section I, (3), Section II, (5) and Section III, (5) are from Exhibit WC-10.

Section I, (5) is from Exhibit WC-14.

Section I, (7) is based on Section I, (6) and actuarial judgment.

Sections II and III, (2) are from Exhibit WC-1.

Sections II and III, (3) are from Exhibit WC-2.

Sections II and III, (4) are from Section I, (8).

Oakland_WC_063022.xlsx
41 CITY OF OAKLAND Exhibit WC-8

WORKERS' COMPENSATION
Frequency Times Severity Analysis
I. Projected Ultimate Claims
Claim
Period
Months of
Development
6/30/22
Reported
Claims
6/30/22
Percent
Claims
Reported
Projected
Ultimate
Claims
(3)/(4)
Payroll
(000)
Frequency
(per $1M of
Payroll)
(5)/(6)X1,000
(1) (2) (3) (4) (5) (6) (7)
------------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- 2012/13 120.0 569 100.0% 569 $355,748 1.60
2013/14 108.0 620 100.0% 620 373,451 1.66
2014/15 96.0 560 100.0% 560 364,737 1.54
2015/16 84.0 612 100.0% 612 390,571 1.57
2016/17 72.0 555 100.0% 555 401,986 1.38
2017/18 60.0 531 100.0% 531 413,589 1.28
2018/19 48.0 560 100.0% 560 376,038 1.49
2019/20 36.0 1,712 99.6% 1,719 392,360 4.38
2020/21 24.0 1,660 99.1% 1,675 402,318 4.16
2021/22 12.0 1,337 95.8% 1,395 428,572 3.25
II. Frequency Times Severity
Claim
Period
Preliminary
Projected
Ultimate
Limited
Losses
Projected
Ultimate
Claims
Average
Severity
(2)/(3)
Severity
Trend
(2022/23
= 1.000)
Trended
Average
Claim
Severity
(4)X(5)
De-Trended
Projected
2022/23
Average
Claim
Severity
(7)/(5)
Frequency
Times
Severity
(3)X(8)
(1) (2) (3) (4) (5) (6) (8) (9)
------------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- 2012/13 $16,388,188 569 $28,802 1.497 $43,117 $20,554 $11,695,415 2013/14 16,422,467 620 26,488 1.430 37,891 21,510 13,336,365 2014/15 13,552,375 560 24,201 1.366 33,063 22,523 12,612,611 2015/16 19,075,215 612 31,169 1.311 40,872 23,465 14,360,781 2016/17 19,886,919 555 35,832 1.264 45,306 24,336 13,506,367 2017/18 15,538,677 531 29,263 1.222 35,768 25,174 13,367,461 2018/19 14,882,387 560 26,576 1.176 31,257 26,162 14,650,770 2019/20 15,045,610 1,719 8,753 1.129 9,881 27,256 46,852,885 2020/21 22,127,023 1,675 13,210 1.083 14,309 28,407 47,581,217 2021/22 28,166,666 1,395 20,191 1.040 21,005 29,578 41,261,595 (7) Projected 2022/23 average claim severity $30,770
Section I, (3) is from Exhibit WC-1.

Section I, (4) is from Exhibit WC-2.

Section I, (6) is from Exhibit WC-10.

Section II, (2) is from Exhibit WC-6.

Section II, (3) is from Section I, (5).

Section II, (5) is from Exhibit WC-14.

Section II, (7) is based on (6) and actuarial judgment.

Oakland_WC_063022.xlsx
42 CITY OF OAKLAND Exhibit WC-9

WORKERS' COMPENSATION
Projected Ultimate Limited Losses to 2021/22
Claim
Period
Developed
Limited
Paid
Losses
Developed
Limited
Reported
Incurred
Losses
Developed
Limited
Case
Reserves
B-F
Ultimate
Limited
Paid
Losses
B-F
Ultimate
Limited
Reported
Losses
Frequency
Times
Severity
Projected
Ultimate
Limited
Losses
(1) (2) (3) (4) (5) (6) (7) (8)
------------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------- to 2002/03 $283,515,058 $277,068,374 $276,352,075 $0 $0 $0 # $276,352,000 2003/04 22,833,003 22,624,175 22,598,711 000 # 22,599,000 2004/05 18,118,376 17,794,815 17,740,308 000 # 17,740,000 2005/06 17,249,861 17,346,457 17,359,855 000 # 17,360,000 2006/07 15,981,003 15,383,125 15,296,271 000 # 15,296,000 2007/08 15,253,245 14,691,141 14,606,291 000 # 14,606,000 2008/09 18,200,635 17,515,576 17,411,931 000 # 17,412,000 2009/10 18,653,432 17,964,352 17,840,997 000 # 17,841,000 2010/11 22,220,843 21,719,185 21,529,056 000 # 21,529,000 2011/12 22,010,852 21,065,318 20,832,713 000 # 20,833,000 2012/13 16,939,139 16,500,352 16,388,188 000 # 16,388,000 2013/14 17,662,945 16,685,238 16,422,467 000 9 16,422,000 2014/15 14,290,887 13,706,825 13,535,214 000 8 13,552,000 2015/16 19,841,120 19,229,836 19,036,560 000 7 19,075,000 2016/17 19,651,442 19,841,978 19,906,179 000 6 19,887,000 2017/18 15,465,644 15,526,028 15,547,110 16,753,692 15,926,975 13,367 ,461 5 15,539,000 2018/19 15,419,442 14,911,226 14,751,904 16,865,341 15,422,706 14,650,770 4 15,145,000 2019/20 16,427,507
14,923,840 14,476,433 18,121,536 15,760,960 46,852 ,885 3 15,494,000 2020/21 26,463,074 21,774,387 20,311,633 22,997,579 21,532,255 47,581 ,217 2 22,265,000 2021/22 38,958,125 29,375,539 25,763,653 25,235,393 25,395,978 41,261 ,595 1 25,316,000 0 0
0 0
0 0
0 0
0 0
(2) is from Exhibit WC-3.
(3) is from Exhibit WC-4.
(4) is from Exhibit WC-5.
(5) and (6) are from Exhibit WC-7.
(7) is from Exhibit WC-8.
(8) is based on (2) to (7) and actuarial judgment.

Oakland_WC_063022.xlsx
43 CITY OF OAKLAND Exhibit WC-10

WORKERS' COMPENSATION
Projected Ultimate Limited Losses for 2022/23 and Subsequent Claim
Period
Projected
Ultimate
Limited
Losses
Payroll
(000)
Limited
Loss Rate
per $100 of
Payroll
(2)/(3)/10
Loss Rate
Trend
(2022/23
= 1.000)
Trended
Limited
Loss Rate
per $100 of
Payroll
(4)X(5)
(1) (2) (3) (4) (5) (6)
---------------------------- ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ 2012/13 $16,388,000 $355,748 $4.61 1.114 $5.13
2013/14 16,422,000 373,451 4.40 1.096 4.82
2014/15 13,552,000 364,737 3.72 1.078 4.01
2015/16 19,075,000 390,571 4.88 1.066 5.21
2016/17 19,887,000 401,986 4.95 1.059 5.24
2017/18 15,539,000 413,589 3.76 1.054 3.96
2018/19 15,145,000 376,038 4.03 1.045 4.21
2019/20 15,494,000 392,360 3.95 1.033 4.08
2020/21 22,265,000 402,318 5.53 1.021 5.65
2021/22 25,316,000 428,572 5.91 1.010 5.97
---------------------------- ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ Total $179,083,000 $3,899,371 $4.59 $4.83
Claim
Period
Projected
Limited
Loss Rate
per $100 of
Payroll
Projected
Payroll
(000)
Projected
Ultimate
Limited
Losses
(7)X(8)X10
Present
Value
Factor
Present
Value of
Projected
Limited
Loss Rate
per $100 of
Payroll
(7)X(10)
Present
Value of
Projected
Ultimate
Limited
Losses
(8)X(11)X10
(1) (7) (8) (9) (10) (11) (12)
---------------------------- ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ 20 2022/23 $5.20 $432,858 $22,520, 000 0.90 $4.69 $20,286,000 2023/24 5.25 437,187 22,973,000 0.90 4.73 20,694,000
2024/25 5.31 441,558 23,435,000 0.90 4.78 21,110,000
2025/26 5.36 445,974 23,906,000 0.90 4.83 21,534,000
2026/27 5.41 450,434 24,386,000 0.90 4.88 21,967,000
(2) is from Exhibit WC-9.
(3) 2012/13, 2013/14, 2014/15, 2015/16, 2017/18, 2018/19, 2019/20, 2020/21 and 2021/22 were provided by the City. Other periods assume a 1% trend.
(5) is from Exhibit WC-14.
(7) 2022/23 is based on (6) and actuarial judgment.

Other period(s) based on 2022/23 plus the trend in Exhibit WC-14. (8) is based on (3) for 2021/22 and a 1% trend.
(10) is based on a 2.5% interest rate and the payout pattern in Exhibit WC-2.

Oakland_WC_063022.xlsx
44 CITY OF OAKLAND Exhibit WC-11

WORKERS' COMPENSATION
Estimated Outstanding Losses as of June 30, 2022
Claim
Period
Limited
Paid
Losses
6/30/22
Limited
Case
Reserves
6/30/22
Limited
Reported
Incurred
Losses
6/30/22
Projected
Ultimate
Limited
Losses
Estimated
IBNR
6/30/22
(5)-(4)
Estimated
Outstanding
Losses
6/30/22
(3)+(6)
Present
Value
Factor
Present
Value of
Estimated
Outstanding
Losses
6/30/22
(7)X(8)
(1) (2) (3) (4) (5) (6) (7) (8) (9)
---------------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- --------------------- to 2002/03 $270,014,341 $5,675, 583 $275,689,924 $276,352,000 $662,07 6 $6,337,659 # 0.94 $5,930,260 2003/04 21,637,529 851,599 22,489,128 22,599,000 109,872 961,471 # 0.92 884,234 2004/05 17,084,326 593,560 17,677,886 17,740,000 62,114 655,674 # 0.90 593,196 2005/06 16,246,220 970,214 17,216,434 17,360,000 143,566 1,113,780 # 0.89 991,963 2006/07 14,919,370 326,149 15,245,519 15,296,000 50,481 376,630 # 0.88 330,400 2007/08 14,240,188 314,926 14,555,115 14,606,000 50,885 365,811 # 0.86 316,235 2008/09 16,847,638 484,784 17,332,422 17,412,000 79,578 564,362 # 0.86 482,762 2009/10 17,070,614 644,343 17,714,956 17,841,000 126,044 770,387 # 0.85 653,107 2010/11 20,243,012 1,102,679 21,345,692 21,529,000 183,308 1,285,987 # 0.84 1,079,912 2011/12 19,785,423 822,259 20,607,681 20,833,000 225,319 1,047,578 # 0.83 873,940 2012/13 15,001,468 1,076,109 16,077,578 16,388,000 310,422 1,386,531 # 0.83 1,156,489 2013/14 15,477,897 721,797 16,199,694 16,422,000 222,306 944,103 # 0.83 787,080 2014/15 12,212,554 984,249 13,196,803 13,552,000 355,197 1,339,446 # 0.83 1,115,512 2015/16 16,604,894 1,761,160 18,366,053 19,075,000 708,947 2,470,107 # 0.84 2,068,465 2016/17 16,036,649 2,723,606 18,760,255 19,887,000 1,126,745 3,850,351 # 0.84 3,243,465
2017/18 11,751,155 2,600,885 14,352,040 15,539,000 1,186,960 3,787,84 5 # 0.85 3,220,335 2018/19 10,640,135 2,806,699 13,446,835 15,145,000 1,698,166 4,504,86 5 # 0.87 3,923,918 2019/20 8,982,500 3,557,882 12,540,382 15,494,000 2,953,618 6,511,500 # 0.89 5,785,930 2020/21 9,910,898 5,674,146 15,585,044 22,265,000 6,679,956 12,354,10 2 # 0.90 11,120,908 2021/22 6,413,415 5,882,244 12,295,659 25,316,000 13,020,341 18,902,5 85 # 0.91 17,120,789 ----------------------- ----------------------- ---------------------- ----------------------- ---------------------- ---------------------- ----------------------- # ----------------------- ----------------------- Total $551,120,226 $39,574,874 $590,695,100 $620,651,000 $29,955,901 $69,530,774 # $61,678,900 #
#
#
#
#
#
#
#
(2), (3) and (4) are net of specific self-insured retention and aggregate retention. (5) is from Exhibit WC-9.
(8) is based on a 2.5% interest rate and the payout pattern in Exhibit WC-2.

Oakland_WC_063022.xlsx
45 CITY OF OAKLAND Exhibit WC-12

WORKERS' COMPENSATION
Projected Losses Paid July 1, 2022 to June 30, 2023
Claim
Period
Months of
Development
6/30/22
Percent
Losses
Paid
Months of
Development
6/30/23
Percent
Losses
Paid
Percent
Outstanding
Losses
Paid
7/1/22 to
6/30/23
[(5)-(3)]/
[100.0%-(3)]
Estimated
Outstanding
Losses
6/30/22
Projected
Losses
Paid
(6)X(7)
Estimated
Outstanding
Losses
6/30/23
(7)-(8)
Present
Value
Factor
Present
Value of
Estimated
Outstanding
Losses
6/30/23
(9)X(10)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
----------------------- ------------------- ------------------ ------------------- ------------------ ------------------- ------------------- ------------------- ------------------- ------------------ ------------------- to 2002/03 240.0 95.2% 252.0 96.7% 30.0% $6,337,659 $1, 901,298 $4,436,361 0.94 $4,153,599 2003/04 228.0 94.8% 240.0 95.2% 9.0% 961,471 87,011 874,460 0.94 818,248 2004/05 216.0 94.3% 228.0 94.8% 8.3% 655,674 54,164 601,510 0.92 553,189 2005/06 204.0 93.8% 216.0 94.3% 7.6% 1,113,780 84,597 1,029,183 0.90 931, 115 2006/07 192.0 93.4% 204.0 93.8% 7.0% 376,630 26,464 350,166 0.89 311,868 2007/08 180.0 92.9% 192.0 93.4% 6.5% 365,811 23,905 341,906 0.88 299,939 2008/09 168.0 92.2% 180.0 92.9% 8.3% 564,362 47,003 517,359 0.86 447,244 2009/10 156.0 91.5% 168.0 92.2% 8.6% 770,387 66,469 703,918 0.86 602,140 2010/11 144.0 90.8% 156.0 91.5% 7.9% 1,285,987 101,395 1, 184,592 0.85 1,0 04,255 2011/12 132.0 89.9% 144.0 90.8% 8.9% 1,047,578 93,136 954,442 0.84 801,49 6 2012/13 120.0 88.6% 132.0 89.9% 11.6% 1,386,531 161,018 1,225,513 0.83 1, 022,382 2013/14 108.0 87.1% 120.0 88.6% 11.5% 944,103 108,180 835,923 0.83 697,23 3 2014/15 96.0 85.5% 108.0 87.1% 11.2% 1,339,446 149,544 1,189,902 0.83 991 ,998 2015/16 84.0 83.0% 96.0 85.5% 14.2% 2,470,107 350,944 2, 119,163 0.83 1,764,873 2016/17 72.0 80.1% 84.0 83.0% 14.9% 3,850,351 572,905 3, 277,446 0.84 2,744,530 2017/18 60.0 76.0% 72.0 80.1% 17.1% 3,787,845 647,094 3, 140,751 0.84 2,645,711 2018/19 48.0 67.4% 60.0 76.0% 26.3% 4,504,865 1,183,921 3,320,944 0.85 2, 823,387 2019/20 36.0 54.7% 48.0 67.4% 28.1% 6,511,500 1,830,497 4,681,003 0.87 4,077,341
2020/21 24.0 37.5% 36.0 54.7% 27.5% 12,354,102 3,402,726 8,951,376 0.89 7,953,933 2021/22 12.0 16.5% 24.0 37.5% 25.1% 18,902,585 4,749,417 14,153,168 0.90 12,740,390 2022/23 0.0 0.0% 12.0 16.5% 16.5% 22,520,000 3,707,317 18,812,683 0.91 17 ,039,361 ----------------------- ---------------------- ---------------------- -------------------------------------------- -------------------- -------------------- ---------------------------------------------- -------------------- ------------------------ Total $92,050,774 $19,349,005 $72,701,769 $64,424,232
(3) and (5) are from Exhibit WC-2.
(7) to 2021/22 is from Exhibit WC-11. The amount for 2022/23 is from Exhibit WC-10. (10) is based on a 2.5% interest rate and the payout pattern in Exhibit WC-2.

Oakland_WC_063022.xlsx
46 CITY OF OAKLAND Exhibit WC-13

WORKERS' COMPENSATION
Projected Losses Paid July 1, 2023 to June 30, 2024
Claim
Period
Months of
Development
6/30/23
Percent
Losses
Paid
Months of
Development
6/30/24
Percent
Losses
Paid
Percent
Outstanding
Losses
Paid
7/1/23 to
6/30/24
[(5)-(3)]/
[100.0%-(3)]
Estimated
Outstanding
Losses
6/30/23
Projected
Losses
Paid
(6)X(7)
Estimated
Outstanding
Losses
6/30/24
(7)-(8)
Present
Value
Factor
Present
Value of
Estimated
Outstanding
Losses
6/30/24
(9)X(10)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
----------------------- ------------------- ------------------ ------------------- ------------------ ------------------- ------------------- ------------------- ------------------- ------------------ ------------------- to 2002/03 252.0 96.7% 264.0 97.7% 30.0% $4,436,361 $1,330,908 $3,105,453 0.94 $2,909,998 2003/04 240.0 95.2% 252.0 96.7% 30.0% 874,460 262,338 612,122 0.94 573,107 2004/05 228.0 94.8% 240.0 95.2% 9.0% 601,510 54,435 547,075 0.94 511,908 2005/06 216.0 94.3% 228.0 94.8% 8.3% 1,029,183 85,020 944,163 0.92 868,316 2006/07 204.0 93.8% 216.0 94.3% 7.6% 350,166 26,597 323,569 0.90 292,737 2007/08 192.0 93.4% 204.0 93.8% 7.0% 341,906 24,024 317,882 0.89 283,115 2008/09 180.0 92.9% 192.0 93.4% 6.5% 517,359 33,808 483,551 0.88 424,197 2009/10 168.0 92.2% 180.0 92.9% 8.3% 703,918 58,625 645,293 0.86 557,840 2010/11 156.0 91.5% 168.0 92.2% 8.6% 1,184,592 102,206 1,082,386 0.86 925,886 2011/12 144.0 90.8% 156.0 91.5% 7.9% 954,442 75,254 879,188 0.85 745,344 2012/13 132.0 89.9% 144.0 90.8% 8.9% 1,225,513 108,956 1,116,557 0.84 937,633 2013/14 120.0 88.6% 132.0 89.9% 11.6% 835,923 97,076 738,847 0.83 616,382 2014/15 108.0 87.1% 120.0 88.6% 11.5% 1,189,902 136,345 1,053,557 0.83 878,759 2015/16 96.0 85.5% 108.0 87.1% 11.2% 2,119,163 236,597 1,882,566 0.83 1,569,458 2016/17 84.0 83.0% 96.0 85.5% 14.2% 3,277,446 465,648 2,811,798 0.83 2,341,710 2017/18 72.0 80.1% 84.0 83.0% 14.9% 3,140,751 467,322 2,673,429 0.84 2,238,726 2018/19 60.0 76.0% 72.0 80.1% 17.1% 3,320,944 567,331 2,753,613 0.84 2,319,593 2019/20 48.0 67.4% 60.0 76.0% 26.3% 4,681,003 1,230,212 3,450,791 0.85 2,933,780 2020/21 36.0 54.7% 48.0 67.4% 28.1% 8,951,376 2,516,389 6,434,987 0.87 5,605,132 2021/22 24.0 37.5% 36.0 54.7% 27.5% 14,153,168 3,898,247 10,254,921 0.89 9,112,226 2022/23 12.0 16.5% 24.0 37.5% 25.1% 18,812,683 4,726,829 14,085,854 0.90 12,679,795 2023/24 0.0 0.0% 12.0 16.5% 16.5% 22,973,000 3,781,891 19,191,109 0.91 17,382,116 ----------------------- ---------------------- ---------------------- -------------------------------------------- -------------------- -------------------- ---------------------------------------------- -------------------- ------------------------ Total $95,674,769 $20,286,058 $75,388,711 $66,707,758
(3) and (5) are from Exhibit WC-2.
(7) to 2022/23 is from Exhibit WC-12, (9). The amount for 2023/24 is from Exhibit WC-10. (10) is based on a 2.5% interest rate and the payout pattern in Exhibit WC-2.

Oakland_WC_063022.xlsx
47 CITY OF OAKLAND Exhibit WC-14

WORKERS' COMPENSATION
Loss Rate and Severity Trend
I. Benefit Level Changes
Effecitive
Date
Benefit
Level
Change
Cumulative
Benefit
Level
Change
(1) (2) (3)
---------------------------- ------------------------ ------------------------ 01/01/13 0.967 0.967
01/01/14 1.012 0.979
01/01/15 1.001 0.980
01/01/16 1.002 0.982
01/01/17 0.992 0.973
01/01/18 0.997 0.971
01/01/19 1.001 0.972
01/01/20 1.002 0.973
01/01/21 1.002 0.975
II. Loss Rate and Severity Trend
Claim
Period
Benefit
Trend
(2022/23
= 1.000)
Residual
Trend
(2022/23
= 1.000)
Retention
Index
(2022/23
= 1.000)
Loss Rate
Trend
(2022/23
= 1.000)
(2)X(3)X(4)
Wage
Trend
(2022/23
= 1.000)
Severity
Trend
(2022/23
= 1.000)
(5)X(6)
(1) (2) (3) (4) (5) (6) (7)
---------------------------- ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ 2012/13 # 1.008 1.105 1.000 1.114 1.344 1.497
2013/14 # 1.002 1.094 1.000 1.096 1.305 1.430
2014/15 # 0.996 1.083 1.000 1.078 1.267 1.366
2015/16 # 0.994 1.072 1.000 1.066 1.230 1.311
2016/17 # 0.998 1.062 1.000 1.059 1.194 1.264
2017/18 # 1.003 1.051 1.000 1.054 1.159 1.222
2018/19 # 1.004 1.041 1.000 1.045 1.126 1.176
2019/20 # 1.003 1.030 1.000 1.033 1.093 1.129
2020/21 # 1.001 1.020 1.000 1.021 1.061 1.083
2021/22 # 1.000 1.010 1.000 1.010 1.030 1.040
2022/23 # 1.000 1.000 1.000 1.000 1.000 1.000
2023/24 # 1.000 0.990 1.000 0.990 0.971 0.961
2024/25 # 1.000 0.980 1.000 0.980 0.943 0.924
2025/26 # 1.000 0.971 1.000 0.971 0.915 0.888
2026/27 # 1.000 0.961 1.000 0.961 0.888 0.854
Section I, (2) and (3) reflect data published by the NCCI.

Section II, (2) is based on Section I, (2).

Section II, (3) is based on 1% trend per actuarial judgment.

Section II, (4) is based on industry statistics and actuarial judgment.

Section II, (6) is based on 3% trend.

Oakland_WC_063022.xlsx
48 CITY OF OAKLAND Exhibit WC-15

WORKERS' COMPENSATION
List of Large Claims
Reported Incurred Losses Greater Than $500,000
Claim
Number
Date of
Loss
Claim
Period
Specific
Self-Insured
Retention
Unlimited
Paid
Losses
6/30/22
Unlimited
Case
Reserves
6/30/22
Unlimited
Reported
Incurred
Losses
6/30/22
(1) (2) (3) (4) (5) (6) (7)
---------------------------- ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ ------------------------ 0000190143 12/27/72 to 2002/03 Unlimited $722,941 $0 $722,941 0000190774 01/19/74 to 2002/03 Unlimited 613,638 0 613,638 0000190326 08/01/74 to 2002/03 Unlimited 771,240 0 771,240 0000190147 07/04/75 to 2002/03 Unlimited 5,403,362 2,228,207 7,631,569 0000190244 10/03/75 to 2002/03 Unlimited 542,435 0 542,435 0000191607 03/11/77 to 2002/03 Unlimited 2,904,822 0 2,904,822 0000190910 12/05/77 to 2002/03 Unlimited 913,798 0 913,798 0000190513 10/19/78 to 2002/03 Unlimited 925,345 0 925,345 0001305216 04/11/83 to 2002/03 Unlimited 800,100 0 800,100 0001305673 10/28/83 to 2002/03 Unlimited 833,461 186,281 1,019,743 0001305402 01/03/84 to 2002/03 Unlimited 583,002 0 583,002 0001305712 01/26/84 to 2002/03 Unlimited 567,073 0 567,073 0008600690 07/16/86 to 2002/03 Unlimited 560,893 0 560,893 0087580347 02/24/87 to 2002/03 Unlimited 676,052 0 676,052 0088580060 10/17/87 to 2002/03 Unlimited 782,553 97,089 879,642 0088580879 07/01/88 to 2002/03 Unlimited 628,550 0 628,550 0088580941 10/06/88 to 2002/03 Unlimited 612,393 0 612,393 0090000792 08/23/90 to 2002/03 Unlimited 560,415 45,231 605,646 0091001095 10/20/91 to 2002/03 Unlimited 667,540 84,612 752,152 0091000967 10/20/91 to 2002/03 Unlimited 615,883 0 615,883 0094630112 08/01/94 to 2002/03 Unlimited 1,409,190 0 1,409,190 0095630121 01/11/95 to 2002/03 Unlimited 601,851 73,146 674,997 0096630131 08/15/95 to 2002/03 Unlimited 808,156 153,724 961,880 0096630617 03/01/96 to 2002/03 Unlimited 541,404 0 541,404 0097630604 07/10/97 to 2002/03 Unlimited 488,894 39,018 527,912 0058620066 01/25/98 to 2002/03 Unlimited 468,427 43,685 512,112 0058620470 06/11/98 to 2002/03 Unlimited 685,025 0 685,025 0059620316 03/26/99 to 2002/03 Unlimited 506,947 0 506,947 0059620442 05/04/99 to 2002/03 Unlimited 684,177 138,698 822,875 0056200017 01/03/00 to 2002/03 Unlimited 670,345 26,732 697,077 0056200781 08/18/00 to 2002/03 Unlimited 443,511 64,318 507,829 0056210090 01/03/01 to 2002/03 Unlimited 393,815 166,919 560,734 0056210086 01/24/01 to 2002/03 Unlimited 531,819 0 531,819 0056210681 07/19/01 to 2002/03 Unlimited 555,676 0 555,676 0108004322 08/23/01 to 2002/03 Unlimited 915,476 0 915,476 0109002741 09/21/01 to 2002/03 Unlimited 731,455 0 731,455 0204001439 04/06/02 to 2002/03 Unlimited 847,137 52,662 899,800 0208004522 08/03/02 to 2002/03 Un
limited 1,606,907 91,327 1,698,234
0208003005 08/11/02 to 2002/03 Unlimited 752,443 0 752,443 0209003498 09/27/02 to 2002/03 Unlimited 632,185 92,589 724,774 0210003933 10/03/02 to 2002/03 Unlimited 660,693 0 660,693 0211004343 11/23/02 to 2002/03 Unlimited 1,141,250 83,477 1,224,727 0308004286 08/16/03 2003/04 Unlimited 493,431 90,600 584,030 0312004058 12/27/03 2003/04 Unlimited 762,769 78,671 841,440 0401000424 01/13/04 2003/04 Unlimited 584,135 0 584,135 0403000853 03/15/04 2003/04 Unlimited 438,711 104,620 543,331 0405001211 05/14/04 2003/04 Unlimited 545,955 203,186 749,141 0509002575 12/03/04 2004/05 1,000,000 855,711 2,581,429 * 3,437,140 * 0506001414 06/23/05 2004/05 1,000,000 881,096 0 881,096 0507002799 07/01/05 2005/06 1,000,000 665,427 0 665,427 0509001885 09/28/05 2005/06 1,000,000 309,277 412,856 722,133 0601000103 01/21/06 2005/06 1,000,000 2,366,438 * 0 2,366,438 * 0602003173 02/28/06 2005/06 1,000,000 506,378 0 506,378 0608001735 08/14/06 2006/07 1,000,000 457,913 205,684 663,597 0701000110 01/20/07 2006/07 1,000,000 504,355 0 504,355 0706001687 06/18/07 2006/07 1,000,000 601,632 0 601,632 0708001974 08/17/07 2007/08 1,000,000 1,522,444 * 376,286 1,898,730 * 0708002337 08/27/07 2007/08 1,000,000 708,184 0 708,184 0802000349 02/22/08 2007/08 1,000,000 432,713 180,406 613,119 0903000603 03/21/09 2008/09 750,000 3,738,332 * 0 3,738,332 * 0906002809 06/12/09 2008/09 750,000 680,452 0 680,452
1003000505 03/19/10 2009/10 750,000 634,989 0 634,989
1008001619 08/06/10 2010/11 750,000 1,035,869 * 0 1,035,869 * 1008001950 08/31/10 2010/11 750,000 584,008 0 584,008
100900068 09/23/10 2010/11 750,000 310,664 419,689 * 730,353 110400180 04/22/11 2010/11 750,000 630,936 0 630,936
121100167 11/14/12 2012/13 750,000 518,743 0 518,743
140600108 06/24/14 2013/14 750,000 3,076,906 * 0 3,076,906 * 150800000 08/03/15 2015/16 750,000 801,034 * 0 801,034 * 170100012 01/08/17 2016/17 750,000 1,994,100 * 1,503,483 3,497,583 * 170100056 01/24/17 2016/17 750,000 1,074,843 * 0 1,074,843 * 180100077 01/26/18 2017/18 750,000 553,288 0 553,288
180800033 08/13/18 2018/19 750,000 4,048,755 * 9,599,204 13,647,958 * The claim(s) indicated by a '*' have been limited in development.

Amounts are gross of excess insurance and net of other recoveries. (1) through (7) were provided by the City.

Oakland_WC_063022.xlsx
49 CITY OF OAKLAND Exhibit WC-16

WORKERS' COMPENSATION
Size of Loss Distribution
I. Reported Claim Count
Claim Size Prior 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/1 9 2019/20 2020/21 2021/22 Total
(2)…(12)
Non-Zero
Claim
Cumulative
Total
Non-Zero
Claim
Cumulative
% of Total
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) 0 2,651 13 29 11 20 7 10 21 18 18 99 2,897

0.01 - 5,000 24,682 368 428 400 395 362 347 400 1,531 1,411 878 31,202 31,20 2 78.2% 5,000 - 10,000 1,656 30 30 37 38 35 37 25 33 63 145 2,129 33,331 83.6% 10,000 - 25,000 1,662 36 20 23 41 34 29 27 38 49 117 2,076 35,407 88.8% 25,000 - 50,000 1,205 25 20 20 31 25 30 17 23 41 34 1,471 36,878 92.5% 50,000 - 100,000 1,017 42 34 20 22 28 35 18 28 25 33 1,302 38,180 95.7% 100,000 - 250,000 926 43 47 38 42 44 29 38 30 39 30 1,306 39,486 99.0% 250,000 - 500,000 195 11 11 11 22 18 13 13 11 14 1 320 39,806 99.8% 500,000 - 750,000 4 21000010000 4 4 3 9 , 8 5 0 9 9 . 9 % 750,000 - 1,000,000 1 30001000000 1 4 3 9 , 8 6 4 100.0% Over 1,000,000 110100201000 1 5 3 9,879 100.0%
Total 34,060 569 620 560 612 555 531 560 1,712 1,660 1,337 42,776 39,879 II. Total Reported Incurred Losses
Claim Size Prior 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/1 9 2019/20 2020/21 2021/22 Total
(2)…(12)
Non-Zero
Claim
Cumulative
Total
Non-Zero
Claim
Cumulative
% of Total
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) 0 $0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0$ 0 $ 0

0.01 - 5,000 20,723,582 407,476 474,270 533,622 521,504 545,417 475,274 456,800 512,783 639,023 1,363,978 26,653,727 26,653,727 4.3% 5,000 - 10,000 11,672,292 210,841 203,591 266,329 254,453 231,536 255,502 164,756 221,783 423,750 1,028,613 14,933,444 41,587,171 6.7% 10,000 - 25,000 27,057,992 532,845 356,287 346,198 641,038 525,976 480 ,476 440,276 611,199 830,422 1,876,057 33,698,765 75,285,936 12.2% 25,000 - 50,000 43,239,025 900,866 712,445 667,513 1,096,447 896,141 1,096,699 621,407 810,085 1,496,991 1,102,977 52,640,596 127,926,532 20 .7% 50,000 - 100,000 72,068,251 3,275,921 2,297,336 1,503,498 1,586,151 2 ,258,209 2,493,899 1,263,949 2,022,012 1,658,515 2,390,676 92,818,415 220,744,947 35.8% 100,000 - 250,000 142,975,925 6,597,343 8,085,248 6,467,998 6,660,61 2 7,105,611 5,107,864 6,022,366 4,901,039 6,566,061 4,211,346 204,701, 413 425,446,361 69.0% 250,000 - 500,000 64,778,960 3,633,543 3,320,517 3,411,646 6,855,848 5,697,367 3,889,039 3,727,280 3,461,482 3,970,281 322,014 103,067,977 528,514,338 85.7% 500,000 - 750,000 25,853,161 518,74 30000 553,2880000 2 6,925,191 555,439,529 90.0% 750,000 - 1,000,000 11,117,28 7000 801,034000000 1 1,918,321 567,357,850 92.0% Over 1,000,000 28,364,792 0 3,076,906 0 0 4,572,426 0 13,647,95 8000 4 9,662,083 617,019,933 100.0% Total $447,851,265 $16,077,578 $18,526,600 $13,196,803 $18,417,087 $21,832,682 $14,352,040 $26,344,793 $12,540,382 $15,585,044 $12,295,659 $617,019,933 $617,019,933 Amounts are gross of excess insurance and net of other recoveries.

Data was provided by the City.
50 38
Appendix E
PRISM
Workers’ Compensation Market Update
February 14, 2023

February 14, 2023

To: Workers’ Compensation Program Members
From: Gina Dean, CEO
Re: Workers’ Compensation Market Update

Better Together - It’s still a good time to be in a JPA!

Much like the liability market, the excess workers’ compensation market is facing challenging renewals for a myriad of reasons. While excess workers’ compensation is a more stable line of coverage, the combination of the aging workforce, medical cost inflation, new and expanded presumptions for public safety personnel, and the pandemic have disrupted the workers’ compensation environment dramatically.

Factors affecting workers’ compensation premium rates according to Safety National include:

Medical Inflation

Workers who are injured on the job are living longer, better lives than they were 25 years ago, which is a positive outcome. However, increased costs associated with new medications and medical devices, like prosthetics, are costly.

Increased Severity of Workplace Injuries

There’s a misconception that losses, in general, are improving. While that is partially true, most of the improvement is on a frequency basis. However, injury severity has not seen the same improvement. Catastrophic claims are becoming more sizable, and the frequency of severe claims has not significantly decreased, partly due to medical inflation.

For example, if a worker becomes a quadriplegic, more resources exist to provide the best possible care. However, it can be quite expensive. Loss prevention methods have traditionally focused on reducing injury frequency. This has helped reduce the number of less costly claims, but not as much emphasis has been placed on lowering injury severity, which results in catastrophic claims.

Data published by the Workers’ Compensation Insurance Rating Bureau points to a firming of the workers’ compensation market in California.

Permanent Disability Claims per 100,000 Employees

California has the highest permanent partial disability claim frequency in the country, approximately two times the countrywide median.

Combined Loss and Expense Ratios

The workers’ compensation industry combined ratio has been trending upward, which tends to be an indicator of increased rates. 2020 was the first above 100% since 2012.

Change in Average Indemnity Cost per Indemnity Claim

Average indemnity costs per claim have been increasing; another indicator of firming rates. The increase in average indemnity costs per claim from 2018 to 2020 suggests moderation of the impact of the SB 863 reforms that kept average indemnity costs relatively flat prior to 2018.

PRISM’s Excess Workers’ Compensation Program (EWC) has been severely impacted by COVID-19 losses and we continue to see increased loss activity, COVID and non-COVID, in the layers above $5M. Excess carriers are placing more emphasis on wildfire related claims, which have the potential to involve severe injury to multiple firefighters in a single incident, and are focusing on employee concentration data related to catastrophic loss (earthquake). All of this contributes to the challenges we are seeing in the California excess workers’ compensation market.

As a result, we expect PRISM EWC members will see rate increases this year. The amount of increase for individual members is dependent upon your entity’s claims experience and size. If you are one of the lucky ones who have not yet experienced these claim trends, you may expect to see increases, but to a lesser degree. The PRISM Committees and Board of Directors have dedicated time and resources to ensure premiums are equitable amongst the members, based on an allocation that takes into consideration each individual member’s potential exposure and claims experience.

What Can You Do?

PRISM Risk Control wants you to know that you are not alone while managing the multitude of risks facing your agency. Our team of specialists is here to help, whether by providing safety and workplace injury prevention training for your employees, direct consultation or connecting you with one of our trusted partners. Regardless of the topic, we encourage you to reach out to the Risk Control team for assistance with your organization’s risk management challenges.

We would also like to call your attention to a few services and resources we think you should be taking advantage of:

• Returning employees to work early in the life of a claim can be one of the most effective cost-control techniques available. PRISM has partnered with Norm
Peterson and Associates to o ffer a discounted rate on return to work services. • The Workplace Violence Prevention guide describes methods public agency employers can adopt to both prevent and protect employees from workplace violence, as well as protect the members of the public they interact with. • Safety Talks: A Tailgate/ Toolbox Resource is a selection of safety meeting topics which may be used to plan safety meetings. The guide includes over 200 topics to choose from such as; safe driving, portable ladders, working safely, hazard communication, and emergency preparedness.
• PRISM has partnered with Company Nurse, a first call, first reporting system that provides both a medical needs triage at the time of injury and a means of completing the first report documents for the member. As a result, more injuries are designated as first-aid while others are immediately directed to the appropriate level of care.

What advantages does PRISM have over a stand-alone open market placement?

PRISM’s EWC Program size is an advantage. A positive for PRISM members is that the size of the EWC Program creates stability and offers economies of scale that could not be realized without being in a large pool. Because of this, we have been able to secure unique reinsurance agreements largely due to the Program’s premium volume.

The EWC Program offers self-insured retentions well below the market minimum attachments. The market’s minimum attachment for entities with police and or fire exposure is generally $1,000,000 and for all other, $500,000.

Pools have an advantage in challenging markets. If we have learned anything from history, we know that JPAs (self-insurance pooling) have been benefiting members in turbulent markets. All members benefit from our flexibility, economies of scale, our leverage in the insurance markets, and our sharing of best practices to help manage risk.