South Carolina’s workers’ compensation costs promise to be much larger than the 12.7 percent suggested by Martin Simmons, the Consumer Advocate’s actuarial witness and according to Peter M. Burton, NCCI Holdings Inc. senior division executive, state relations.
“There was no mention of the much larger increases testified to by other parties,” Burton told Insurance Journal. “In particular, the Insurance Department’s consultant recommended an increase almost twice as large as Simons, another nationally recognized actuary also testified that he was comfortable with an even larger increase.
Simons also alluded to inconsistencies in NCCI’s test audit program.
“This program is voluntary, used in only four states, and is a small sampling of policies,” Burton explained. “The program results are not reflective of the overall quality of the data employed in workers compensation filings, as it is a program developed to assist the proficiency of premium auditors to perform a better job in evaluating policies. The results cannot be extrapolated to reflect the entire industry in South Carolina.
“Simons also criticized carriers for not properly reflecting Second Injury Fund offsets. NCCI’s statistical plan, which has been approved by the South Carolina Department of Insurance, has specific rules as to how such offsets are to be reflected in corrections of employer safety records. The Department of Insurance, through its ongoing carrier audits, ensures that carriers are properly reflecting these offsets.
“With regard to the quality of NCCI’s data, we recently received a report from the South Carolina Workers Compensation Advisory Board noting that our handling of data was adequate and met South Carolina requirements,” Burton said. “In addition, a January 2006 audit conducted for the Florida Office of Insurance Regulation found that NCCI’s data and actuarial procedures were appropriate.”
Burton said NCCI looks forward to discussing these and other actuarial issues at the upcoming April rate hearing. It believes this is the best forum to fairly and completely evaluate the case.
Was this article valuable?
Here are more articles you may enjoy.
‘Dirty Dozen’ Unsafe Employers Putting Workers at Risk 
Florida Governor Signs Wind-Mitigation Funding Bills for Homes, Condos 
Two Montgomery Workers Charged with Insurance Fraud in Alabama 
Billionaire Ellison Is Moving Oracle to Nashville From Texas 
