In Kentucky, workers’ compensation loss costs used by insurers in figuring rates to charge employers will show an overall decrease for the ninth straight year.
Kentucky Insurance Commissioner Sharon P. Clark announced today that the state’s Department of Insurance has approved the National Council on Compensation Insurance’s (NCCI) proposal filed on July 2.
The approved loss cost figures, which will become effective on Oct. 1, show an average reduction of 6.9 percent for the 586 industrial classes used in Kentucky. The industrial classes include manufacturing, office and clerical, contracting, and goods and services. For coal classes, surface mining increased 3.1 percent and underground mining costs decreased 7.7 percent.
“NCCI reports that the industry is becoming more balanced,” Commissioner Clark said. “This is good news for Kentucky as we have seen a combined reduction of 50.4 percent in the last nine loss cost filings.”
Commissioner Clark said the combined efforts of Gov. Steve Beshear’s administration, the state’s General Assembly, employers and employees who are excelling in safety initiatives, and successful attempts to control medical costs have resulted in a sustained, positive impact on Kentucky’s workers’ comp market.
Data collected from insurance carriers is used to develop loss costs, which are the average compensation for lost wages, based on the level of disability, plus medical benefit payments. Use of the information is voluntary but most workers’ comp carriers use the NCCI loss cost values as the base to which the insurer’s own loss adjustment and overhead expenses are added to arrive at the rates charged to Kentucky employers.
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