Maine’s Insurance Superintendent Approves Decrease in Workers' Compensation Loss Costs; Paves the Way for Lower Premiums

Monday, February 26, 2018

Maine’s Superintendent of Insurance Eric Cioppa recently announced approval of the National Council on Compensation Insurance, Inc.’s (NCCI) 2018 loss costs for Maine, which proposed an average loss cost decrease of 12%. With this approval, the new NCCI loss costs go into effect for new and renewing policies as of April 1, 2018.

NCCI is the advisory rating organization for Maine workers’ compensation insurance companies.

Loss costs are based on previous and projected losses and benefit payments employers are expected to incur. NCCI provides advisory rates for insurance carriers that offer workers’ compensation coverage in Maine. When such insurers file their rate requests with the Bureau of Insurance, NCCI-approved loss costs are available as a reference.

The loss costs change ranges from -10.4% to -15.1% depending on the industry; the 12% decrease represents an average. According to the Bureau of Insurance, because this is an average decrease, rates for some businesses will go up but most will go down. Also keep in mind that the loss cost decrease is only a recommendation; individual insurers may or may not accept the proposed change in loss costs.

“Maine employers’ efforts to improve workplace safety, return injured workers to their jobs in a timely manner, and control medical costs continues to pay off,” Cioppa stated. “This most recent decrease should result in lower workers’ compensation premiums on average across all industry groups.” Cioppa stated that recently filed NCCI loss costs represent a cumulative decrease of 59.5% since the 1992 workers’ compensation reform, and that if all insurers fully adopt the decrease, Maine businesses could save an estimated $27 million in the year following implementation.

MEMIC, Maine’s largest workers’ compensation insurer, will adopt the rate recommendation. MEMIC reports that this amounts to the largest rate reduction in more than 20 years.

No comments:

Post a Comment