Workers’ compensation rates will soon be less expensive for businesses in West Virginia.
According to West Virginia Insurance Commissioner Allan McVey, a filing for a 13 percent decrease in voluntary market loss costs by the National Council on Compensation Insurance (NCCI) has been approved and will take effect Nov. 1, 2018. The decrease applies to all standard classifications.
In addition, an overall average assigned risk rate level decrease of 10.3 percent was approved and will also go into effect Nov. 1.
According to NCCI, the proposed decrease was based on premium and loss experience for policy years 2014, 2015 and 2016. The licensed rating organization authorized to make rate filings on behalf of workers’ compensation insurance companies in West Virginia also noted that West Virginia’s claim frequency has generally declined since 2008 and after adjusting to a common wage level, indemnity and medical average cost per case figures have remained relatively consistent for the last five policy years.
The rating changes by industry group that will go into effect Nov. 1 are as follows:
A statement from West Virginia Governor Jim Justice’s office said these recent decreases make 14 consecutive workers’ comp decreases for the state and amount to a cumulative decrease of 75.8 percent and aggregate premium savings of $398 million. West Virginia moved to privatize its workers’ compensation fund in 2006 and began adding private insurers to compete with its stand-run fund shortly after.
McVey said in the statement that in addition to the most recent voluntary market savings, the Old Fund deficit surcharge of 9 percent will terminate as of Jan. 1, 2019.
“When we started privatization in 2006 West Virginia had an unfunded liability of approximately $3.5 billion in this fund. We now have substantially gotten to the point of seeing the light at the end of the tunnel as claims at the point we started were at approximately 45,000 and as of July 2018 they are at about 11,700 and continue to reduce. This is what is pushing the rate reductions,” McVey said.
He also noted that safety programs instituted by many employers in the state, with the assistance of carriers, has helped to achieve these results.
“I feel an investment up front to do this has limited claims along with the fact no one wants to be injured or get sick as the result of a condition in the workplace. Also, the employees who are injured or getting sick are being well taken care of by the carriers and third-party administrators because we are also seeing fewer complaints and protests,” McVey said.
He pointed to a decline in the number of cases from West Virginia Workers’ Compensation Office of Judges and Board, which is responsible for handling private carrier or self-insured employer appeals of claims management decisions in workers’ compensation cases. In 2005, McVey said there were 18,975 protests presented to to the Office of Judges and Board and this year that number had dropped to 1,731 with a current caseload of 2,074. The Workers’ Compensation Board of Review has only had 301 appeals.
Gov. Justice praised the decrease in a statement saying it was “great news for West Virginia and our business community.”
“This is the 14th straight decrease we’ve had since the state moved to privatization in 2006 and it represents not only a $25 million aggregate premium reduction on this line of insurance but also significant savings for state businesses that will allow them to use that money to reinvest in our economy,” he said.
Was this article valuable?
Here are more articles you may enjoy.