The Connecticut Insurance Department has approved a slight decrease of 0.3 percent in workers’ compensation loss costs beginning Jan. 1, 2005. The department has also rejected a proposed hike in assigned risk rates, approving instead an overall 6.2 percent reduction in assigned risk premium levels.
The National Council on Compensation Insurance (NCCI), using and adjusting loss experience in Connecticut from policy years 2001 and 2002, made the filings on behalf of the state’s writers of workers’ comp.
While the loss cost change is in keeping with NCCI’s bid, the assigned risk change is not. NCCI had requested a 4.2 percent boost in assigned risk premiums levels but that will not happen because the department rejected two key elements that were behind that figure. NCCI had wanted a 2.5 percent profit provision on assigned risk accounts and had sought to eliminate premium discounts now granted on certain assigned risks.
In rejecting the 2.5 percent assigned risk profit add-on, Commissioner Susan Cogswell ruled that it would be an “undue burden for many employers.” She noted that many small employers without any voluntary market alternative end up in the assigned risk plan, where they already pay a risk differential.
Premium discounts are permitted on accounts above $5,000 and can go as high as 10.5 percent. NCCI had proposed removal of premium discounts for risks in the assigned risk plan as a way to help depopulate the plan. Cogswell turned down this change as well, claiming it would be an additional burden on many larger employers who have little chance of being covered in the voluntary market.
The overall 0.3 percent cut in loss costs for the voluntary market is distributed by industry group as follows: Manufacturing (-1.7%); Contracting (-0.7%); Office & Clerical (-0.2%); Goods & Services (+2.0%); and Miscellaneous (-3.0%).
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