The National Council on Compensation Insurance has submitted a filing for an average increase of 3.4 percent for workers’ compensation voluntary insurance loss costs, according to Nevada Insurance Commissioner Alice A. Molasky-Arman. The NCCI has also filed for an average increase of 5 percent for workers’ compensation insurance assigned risk rates. The changes vary by classification and are proposed to be effective March 1, 2007.
The NCCI filing also has proposed an experience rating formula adjustment to bring the average experience modification closer to 1.00. Experience rating is used to encourage employers to maintain safe workplace environments. Under experience rating, employers with better than average recent historical experience pay less premium than those with poorer than average experience for the class of business, the Commissioner’s office said. The office noted the impact of the proposed adjustment will be an overall 1 percent premium increase. With the proposed change to the experience rating formula, the overall proposed voluntary premium increase is +4.4% and the overall proposed assigned risk premium increase is +6.1%.
The proposed modest increases follow three years of overall decreases, according to NCCI. The increases recognize the cost of living adjustments that were enacted during the 2003 Legislative session and increasing medical costs.
Molasky-Arman commented that while she would prefer rates continue to decrease, she recognizes the inflationary pressures on workers’ compensation costs and is pleased that the overall proposed change is modest.
She clarified that NCCI loss costs are only one component of the rates charged by insurers and each insurer must file a loss cost multiplier to include expenses and profit. As a result, not every insurer charges the same rate, and employers should shop for the best rate.
Molasky-Arman anticipates making a decision on the filing within the next month.
Source: OIC
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