NCCI: Latest rate filings largely reflective of frequency, economy

Workers' comp rates are headed up in at least eight states next year, with at least 11 others considering increases. While each state's workers' comp system has its unique characteristics, several themes are emerging throughout the country.

"Frequency has flattened in some states or increased in others . . . medical costs continue to be a driver in most states," said Peter Burton, NCCI's senior division executive for state relations. "Some older cases are just developing larger than what was anticipated . . . many states have development issues in older claims."

NCCI has filed for rate increases in 18 of the 28 states where it has filed so far -- more than the total 15 that were filed in all of last year, Burton said. They range from a high of 10.5 percent in Virginia to 1.4 percent in Maryland.

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At the same time, NCCI filed for rate decreases in seven states. "Frequency continues to be a primary factor" in those states, Burton said. "There is good injury experience; people are not getting injured as much."

So far, these states have approved NCCI's rate filings:

New Mexico: 7.4 percent increase.
District of Columbia: 6.2 percent increase.
Arizona: 5.2 percent increase.
Iowa: 4.4 percent increase.
Colorado: 3.7 percent increase.
Idaho: 2.9 percent increase.
Oregon: 1.9 percent increase.
Utah: 1.5 percent increase.
North Carolina: 0.0 percent.
Oklahoma: 1.7 percent decrease.
Missouri: 3.0 percent decrease.
Kentucky: 7.5 percent decrease.
West Virginia: 8.1 percent decrease.

Rate filings under consideration. The following states are considering NCCI rate recommendations:

Virginia: 10.5 percent increase.
Florida: 8.9 percent increase; given preliminary approval.
New Hampshire: 6.7 percent increase.
Hawaii: 5.2 percent increase.
Connecticut: 4.5 percent increase.
Illinois: 3.7 percent increase.
Alaska: 2.7 percent increase.
Kansas: 1.7 percent increase.
Tennessee: 1.6 percent increase.
Maryland: 1.4 percent increase.
Texas: 0.3 percent decrease.
Maine: 3.2 percent decrease.
Alabama: 9.3 percent decrease.

NCCI also made law filings in Tennessee and Illinois. Those are "put in regulators' hands to recognize changes that are off cycle," Burton explained. Illinois regulators adopted an 8.8 percent lost cost decrease, following passage of legislative reforms that included a 30 percent reduction in the state's medical fee schedule. Tennessee regulators approved a 6.3 percent increase.

New Jersey. In New Jersey, the Compensation Rating and Inspection Bureau has filed a 6.9 percent rate increase for next year. Officials told the Department of Banking and Insurance that frequency has leveled off, and medical and indemnity costs are increasing. Additionally, the premium base has decreased due to the slow economy.

Read more at the WorkersComp Forum homepage.

October 31, 2011

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