Maine Approves 19% Drop in Workers’ Compensation Costs Starting in April

Newly-installed Maine Insurance Superintendent Robert Carey announced approval of an average workers’ compensation insurance loss cost decrease of 19%. The new loss costs go into effect for new and renewing policies as of April 1, 2024.

Carey said that if all insurers fully adopt the decrease, Maine businesses could save an estimated $55 million.

This latest action contributes to a cumulative 88.2% decrease in loss costs since workers’ compensation reforms were enacted in 1992. Last April, an average loss cost decrease of 11.9% went into effect.

The approved changes were filed on behalf of insurers by the advisory rating firm, National Council on Compensation Insurance (NCCI). The-approved loss costs are available to insurers to reference when filing their workers’ compensation rates with the Bureau of Insurance.

“This is good news for Maine employers,” said Carey, who was sworn into office late last month after being confirmed by the state Senate. “The NCCI loss costs are the standard for most workers’ compensation coverage in Maine, and they are an important part of the rates charged for this coverage. This filing should result in lower workers’ compensation rates for the majority of Maine employers.”

According to the state regulator, the 19% decrease is an average loss costs change, which ranges from -17.1% to -20.1% depending on the industry group. This is an average decrease so most Maine businesses should see decreases in premiums, but some individual businesses may see increases.

Loss costs are based on previous and projected losses and benefit payments. Maine has a competitive market for workers’ compensation insurance and each insurer sets its own rate level, subject to review by the Bureau. Insurers may also modify the NCCI loss costs, and they select their own expense and profit factors in setting rates.

Topics Workers' Compensation Talent Maine