Missouri: State recommends more than 8% decrease in comp loss costs

Employers in Missouri may see a drop in their workers' compensation premiums after state officials called for an 8.1 percent overall decrease in loss costs for 2010.

Officials from the Missouri Department of Insurance recommended the rate cut after reviewing statewide data for insurance claims paid by employers for injured workers in 2009. A filing by the National Council on Compensation Insurance had proposed a 1.9 percent overall decrease in loss costs. However, the department suggested the larger decrease after reviewing the NCCI filing as well as the underlying claim and payroll data. This marks the fourth consecutive year that NCCI and the department have recommended loss cost decreases.

Under Missouri law, insurers and self-insurers are allowed to set their rates based either on the recommendations of NCCI or the department. Both the NCCI and the department make recommendations for general loss costs, as well as for specific industry groups.

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"If insurers implement our recommended decrease, Missouri employers could see as much as $80 million in reduced premiums in the coming year," said John M. Huff, director of the Missouri Department of Insurance, Financial Institutions and Professional Registration. "In today's challenging economy, it's important that state government be a strong and effective partner with Missouri businesses to keep costs down."

Huff said the workers' comp market is increasingly competitive in Missouri with 25 new insurers entering the market since 2008. More than 250 companies are actively writing workers' comp policies in the state. Huff said competitive prices are largely due to continued improvements in workplace safety, resulting in fewer workers' comp claims. The frequency of on-the-job injuries is down 60 percent over the past 15 years, he said.

Fraud collections increase. In addition to the rate cut announcement, Missouri Attorney General Chris Koster said there was dramatic increase in workers' comp fraud collections in 2009. According to Koster, his office filed charges against 27 violators for workers' comp fraud last year, as compared with eight in the previous year. More than $838,000 was assessed against violators for fraud and for insurance coverage noncompliance in 2009 versus $461,000 in 2008. Money collected from the cases goes to the State Workers' Compensation Fund or to make restitution for victims of workers' comp fraud violations.

Koster credited the increase in charges and collections with staff realignment to dedicate more resources to prosecuting workers' comp fraud and cases involving insurance noncompliance. The Attorney General's office is prosecuting 183 cases for workers' comp fraud or insurance noncompliance, he said.

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February 1, 2010

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