CORRELATES OF WORKERS COMPENSATION CLAIMS ADJUSTMENT

Using a sample of New York nonscheduled permanent disability claims, t his article estimates the probability of controversion (the act of den ying liability for a workers' compensation claim) and the conditional probability of benefit reductions initiated by insurers. The data sugg est that insurers are more likely to adjust claims where the probabili ty of a successful adjustment (i.e., an adjustment that is upheld by t he workers' compensation board) is high. Although there is some eviden ce that insurers are more likely to adjust more costly claims, benefit levels are negatively related to adjustment probability, contrary to expectations. These results indicate that insurers are less likely to adjust high benefit claims since these claimants are more likely to re sist adjustment efforts.