Nevada: NCCI recommends 4.9% drop in voluntary loss costs

Employers may see their workers' compensation costs drop in 2009 under a recommendation by the National Council on Compensation Insurance.

NCCI submitted a filing in the state requesting an average decrease of 4.9 percent in workers' comp voluntary loss costs. The rating organization also recommended Nevada lower its workers' comp assigned risk rates by an average of 6 percent. If approved, the new rates would go into effect on March 1.

Scott Kipper, commissioner of the Nevada Division of Insurance, said the recommended changes vary by industry classification and are as much as 20 percent above or below the average for the classification's industry group. By industry group, the proposed average recommended changes include:

Contracting -- 5.5 percent decrease in average voluntary loss costs and 6.6 percent decrease in average assigned risk rates.
Goods and services -- 5.6 percent decrease in average voluntary loss costs and 6.7 percent decrease in average assigned risk rates.
Manufacturing -- 9.1 percent decrease in average voluntary loss costs and 10.1 percent decrease in average assigned risk rates.
Office and clerical -- 2.8 percent decrease in average voluntary loss costs and 3.9 percent decrease in average assigned risk rates.
Miscellaneous -- 1.5 percent decrease in average voluntary loss costs and 2.6 percent decrease in average assigned risk rates.

NFL seeks to seal the deal against players filing in California (04/19/12)
Washington: DLI looks to establish medical provider network (09/10/12)
Physician-owned surgery centers come under researchers' scrutiny (06/18/12)
Coalition disputes contentions in think tank's report on N.Y. assessments (04/19/12)
Report outlines effective strategies for successful self-insurance groups (06/18/12)

The NCCI filing also proposed an experience rating formula adjustment to bring the average experience modification closer to 1.0. Officials said the experience rating is used to encourage employers to maintain safe workplace environments. Under the rating, employers with better than average recent historical experience pay less premiums than those with poorer than average experience for their class of business. Experience rating applies to all but the smallest or newest employers.

Drop in claim frequency behind recommendation. Kipper said the decrease in claim frequency is the driving force behind the proposed rate changes. Decreasing claim frequency, he said, has more than offset the increasing indemnity and medical costs per claim, the cost-of-living benefit adjustments that were enacted during the 2003 legislative session, and the impact of the payroll cap.

NCCI loss costs are only one component of the rates charged by insurers in Nevada. Each insurer must file a loss cost multiplier to include expenses and profit. As a result, not every insurer charges the same rate.

Kipper said he will decide on the filing within the coming weeks.

February 26, 2009

Newsletter Sign-up