Missouri Regulator Shaves Workers’ Compensation Loss Costs Hike to 10.1%

December 24, 2013

The Missouri Department of Insurance is recommending a 10.1 percent increase in workers’ compensation loss costs for next year, a lower increase than that suggested by the National Council on Compensation Insurance.

The NCCI had recommended an 11.6 percent increase to be effective Jan. 1, 2014.

The difference is based on NCCI’s exclusion of Missouri Employers Mutual in its review and its claim expense estimates, the department said. Missouri Employers Mutual is the state’s largest insurer for workers’ compensation, with 17.75 percent of the market.

As part of its review of workers’ compensation insurance rates, the Department of Insurance uses data from the NCCI.

The NCCI is an insurance industry-funded group paid by workers’ compensation insurers to develop advisory loss costs based on workers’ compensation claim data. Insurers use loss costs to set their workers’ compensation rates.

The NCCI estimates that Senate Bill 1, which was passed by the Missouri General Assembly earlier this year, will impact Missouri loss costs by raising them 3.8 percent to pre-fund second injury liabilities for claims previously reimbursed by the Second Injury Fund.

Under Missouri law, insurers may set rates based on NCCI recommendations, the department’s calculation or their own actuarial analysis. Missouri law does not require insurers to change or increase their rates in 2014 because of the NCCI’s recommendation.

Although the decline in claim frequency has abated in the most recent years, Missouri benefited from a 26 percent decrease in claim frequency from 2004 to 2011.

The NCCI 2014 loss cost filing along with DIFP’s independent review of loss cost data is available on the department’s website.

Source: Missouri Department of Insurance

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