In California, every large insurance agency or brokerage firm has at least one workers’ compensation claims consultant on staff to analyze reserves, evaluate claims administrator performance and consult with their clients, the employers. There are also numerous private claims consultants available for hire to assist companies with their work comp needs. In addition, attorneys have been known to hire consultants as expert witnesses in civil actions involving allegations of negligent claims handling.
With that said, we ask the following questions about how someone becomes a claims consultant:
- What are the qualifications?
- What type of a license and/or bond is required by the Department of Insurance?
- What type of industry and/or trade group certification is required?
- What are the educational requirements?
- How much claims handling experience is needed?
- What type of public database exists for employers and others to check on the registration and discipline history of a given consultant?
Surprisingly, the answer to all the above questions is “none.” Claims consulting is a totally unregulated industry. Absolutely no rules or requirements exist for a person to become a consultant. There are no experience, educational, licensing, or bond requirements. Furthermore, no state (including California) maintains a database to register consultants.
The bottom line is that anyone can call themselves a work comp claims consultant, advertise their services, and charge whatever amount an employer is willing to pay!
We are aware of numerous instances when unqualified claims consultants have held themselves out as experts in workers’ compensation, to the detriment of their hirer. In one case, after an adjuster at a major insurance company was terminated for incompetence, he decided to open his own claims consulting business. In another instance, someone with only six months’ experience handling comp claims opened their own private consulting practice. Yet another consultant we’ve encountered is a former underwriter who has never handled a claim in their life.
As for consultants who work for large insurance agencies or brokerage firms, some are former claims supervisors and adjusters, while many are trainees with very limited knowledge of claims procedures.
Having written the foregoing, we wish to emphasize that there are many good claims consultants in the field, but everyone, including experienced consultants, requires basic (and continuing) education. In a search of various databases, we were unable to find any public classes or programs available on the subject of workers’ compensation claims consulting. Without formal education, consultants are left to learn by trial and error, often at the employer’s expense.
Fortunately for our clients and professional colleagues, the field of claims consulting is about to take a quantum leap forward. We have recently learned that there will soon be a private 18-session seminar series available, the purpose of which will be to provide education to the claims consulting profession. It will be the first of its kind in California. If interested, please contact us for details!