Guides / Setting PD reserves
Guide · 6 min read

Setting PD Reserves in California — Before the DEU Gets Back to You

The desk examiner’s workflow for same-day PD reserves: pull the WPI and apportionment from the P&S report, rate it in a minute, reserve the computed indemnity — with a fully worked example, the §4650(d) cushion, and the TD side of the file.

Every desk examiner knows the gap: the P&S report lands Monday, the DEU summary rating comes back in some number of weeks, and the file needs a PD reserve today. The schedule math is deterministic — there is no reason to wait on it. Here is the same-day workflow, fully computed.

The day the report lands

Three numbers come out of the report: WPI per body part, apportionment, and the work status. Add what the file already knows — occupation and date of birth — and the rating pipeline is fully determined: ×1.4, occupational variant, age adjustment, §4663 split. The calculator runs it live and prints the DEU-format string for the file note.

Worked example · P&S report in hand
Shoulder, 12% WPI, no apportionment · carpenter (group 380) · age 44 · 2026 DOI:
100% (16.02.01.00 - 12 - [1.4]17 - 380H - 21 - 22) = 22% PD
85.5 weeks × $290 = $24,795 PD indemnity reserve

That figure — and the string that proves it — goes in the reserve worksheet and the authority memo the same day. When the DEU rating arrives, it should say the same thing; if it doesn’t, the string shows exactly which step differs.

The cushions

§4650(d). If PD advances have run late, each late installment carries an automatic 10%. Reserving the exposure on our example means $24,795 × 1.10 = $27,274.50 — the calculator’s §4650(d) toggle computes it. The litigated §5814 25% is separate exposure on unreasonable-delay facts.

The TD tail. If the worker isn’t P&S yet, the TD side is two-thirds of AWW against the 104-week cap (§4656). At a $1,600 AWW that is $1,066.67/week — 30 authorized weeks remaining is ≈ $32,000 of exposure, and the statutory worst case is 104 × $1,764.11 = $183,467.44. The calculator’s TD exposure card runs the §4656 clock on the actual periods in the file.

The big flags. At 70%+ PD a life pension attaches (§4659) — actuarial money that dwarfs the visible award; the money chart flags every 70+ row. And future medical is its own reserve line under your carrier’s standards — the one piece no calculator prices.

Scale it across the diary

For diary reviews and portfolio scrubs, the batch tool takes CSV rows — impairment, WPI, group, age, apportionment — and returns rated strings, weeks, and dollars for the whole list at once, exportable back to CSV. Twenty-five files in the time one DEU request takes to write.

Papering the file

Authority requests move faster when the number arrives with its work shown. The calculator’s exhibit export prints the full audit trail — every table lookup from WPI to final — which is the difference between “the adjuster estimates” and “the schedule computes.” Reserving philosophy and redundancy factors are your carrier’s; the statutory anchor inside them is this. Informational use only.

FAQ

How do adjusters calculate PD reserves in California?
From the medical evidence: take the WPI and apportionment from the P&S or med-legal report, run the 2005 PDRS math (1.4 multiplier, occupational variant, age), and reserve the resulting indemnity — weeks × PD rate. Engine-computed example: a 12% WPI shoulder for a 44-year-old carpenter rates 22% PD, 85.5 weeks, $24,795 at the 2026 maximum.
Do I have to wait for a DEU rating to set reserves?
No. DEU summary ratings take weeks; the schedule math itself is deterministic. Rating the report yourself the day it lands — and papering the file with the full rating string — is exactly what a calculator with an audit trail is for. The DEU rating, when it arrives, should match.
What else goes in the reserve besides the PD indemnity?
The TD tail (remaining exposure toward the 104-week cap), a cushion for §4650(d) 10% if payments have run late, life-pension exposure at 70%+ ratings, and future medical per your carrier’s standards. The indemnity anchor is computable; the medical tail is a judgment.
Is this reserving advice?
No — reserving philosophy, redundancy factors, and rounding rules are carrier-specific. This page shows the computable statutory anchor that belongs inside whatever standard your program uses.
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