Chesapeake Employers’ Insurance Company, Maryland’s largest writer of workers’ compensation insurance, announced its plan to phase in the National Council on Compensation Insurance’s (NCCI) rating methodology and other changes as required by state legislation enacted in 2015.
Chesapeake Employers President and CEO Tom Phelan said S.B.465 will make several changes to Chesapeake Employers, which will occur over the next several years. Phelan announced the plan in a March 28 customer update letter.
Phelan said that when all steps as outlined in the legislation are completed, Chesapeake Employers will be just like any other mono-line insurance carrier, with two exceptions: it will continue to be the workers’ compensation guaranteed market writer in Maryland; and two of the nine Board members will be appointed by the governor.
The legislation mandates that Chesapeake Employers must join the National Council on Compensation Insurance (NCCI) and adopt their rating methodology, their experience modification calculation, scheduled rating and file rates with the Maryland Insurance Administration, effective Jan. 1 2023. Chesapeake Employers plans to begin the phase-in process in 2020.
Phelan said this will be a controlled phase-in from the current Chesapeake Employers’ rates and individual experience modifications or e-mods to the new NCCI-based rates and their e-mod calculations. “We plan a very orderly transition with minimal changes occurring each year,” he said.
“Please be assured that our goal in this process is to minimize any negative impact on our policyholders,” Phelan added. “Internally we are meeting regularly with key operations departments to analyze, plan and test the phase-in to NCCI rates. I am personally leading this planning process and the six-year transition to NCCI.”
The law also requires Chesapeake Employers to begin paying federal taxes in 2022. In addition, Chesapeake Employers will be able to write workers’ compensation in other states starting in 2022.
“Initially we will explore the possibility of writing business in Virginia and the District of Columbia,” Phelan said. “Writing coverage in additional nearby states is a possibility in the future.”
“Over the next few years we will continue to keep you up-to-date once definitive decisions have been determined and approved by our Board of Directors,” Phelan said.
Chesapeake Employers, formerly known as Injured Workers’ Insurance Fund (IWIF), transitioned from a state-run workers’ compensation insurance carrier to a private, nonprofit company in 2013. It has served as a continuous, guaranteed source for workers’ compensation insurance in Maryland since 1914.
Topics Legislation Commercial Lines Workers' Compensation Business Insurance Maryland
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