Beginning Dec. 1, 2002, workers’ compensation loss costs for Colorado will decrease an average of 10.5 percent. Although individual employer workers’ compensation premiums are affected by other rating factors, many Colorado employers will see a decrease in their premiums. Acting Insurance Commissioner M. Michael Cooke recently signed an order that finalized the decrease.
“This is the second year in a row that Colorado workers’ compensation costs have decreased. This is due in no small degree to the hard work of Colorado employers to create and maintain safe working conditions,” said Governor Bill Owens. “The accomplishment is even more significant since some states have seen increases in workers’ compensation costs.”
Last year, the loss costs decreased on average 7.4 percent.
On Aug. 1, 2002, the National Council on Compensation Insurance (NCCI) submitted its annual workers’ comp loss cost rating values filing with a proposed average decrease of 10.2 percent. In accordance with §10-4-406(3.5), C.R.S., the Division contracted with and sought the advice of MMC Enterprise Risk Consulting Inc. (ERC), an independent actuary.
“It is important to hear from knowledgeable sources who can provide valuable information to better help us with the decision making process,” Acting Commissioner Cooke said. “We received significant input from industry experts and the public.”
A public hearing was held on Sept. 3, 2002. After deliberation, Acting Commissioner Cooke ordered that the proposed filing be amended to reflect an average 10.5 percent decrease to the loss costs and rating values, as recommended by the independent actuarial review.
The NCCI, a rating and advisory organization, collects annual data on workers’ comp claims for the insurance industry. The NCCI loss cost filing includes data from 150 insurance companies that write workers’
comp insurance in Colorado and includes loss experience from the companies for a five-year period. Loss costs are a significant, but not the only factor, used in establishing each employer’s actual premium.
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