Maine Governor John Baldacci recently announced that the National Council on Compensation Insurance (NCCI) has filed a request to decrease workers’ compensation loss costs for policy year 2004 by an average of 3.3 percent.
The requested decrease is reportedly good news for Maine employers and comes at a time when many states are experiencing increasing, rather than decreasing, workers’ compensation rates.
“The NCCI’s filing for a proposed reduction in workers’ compensation loss cost insurance rates is another positive milestone in our efforts to control costs and preserve jobs,” said Baldacci.
“This proposed loss cost decrease represents a reduction in the number of compensable injuries and the average cost of those injuries for policies that were in effect during 2001 and 2002,” stated Superintendent of Insurance Alessandro Iuppa. “The filing is further evidence that Maine’s workers’ compensation market continues to reflect the stability of our workers’ compensation laws.”
The requested effective date for the proposed decrease is Jan. 1, 2004.
The good news in Maine reportedly contrasts favorably with trends in many other states. NCCI has reviewed 20 states for the 2003/2004 filing cycle. Of those states, two-thirds (13 states) have proposed increases, two will not have filings, and only five (including Maine) have proposed decreases.
Maine’s improved ranking in states’ worker compensation costs was also reportedly confirmed in a study by the Oregon Department of Consumer and Business Services. In its report Workers’ Compensation Premium Rate Rankings for 2002, Maine ranked 23rd lowest among the 51 states plus the District of Columbia in workers’ compensation rates. In that study, more than half the states had higher workers’ compensation rates than Maine.
NCCI lost costs filings do not automatically result in rate reductions to employers, but are the first step in the process of adjusting rates. The Bureau of Insurance will now review the NCCI rate filing and make a recommendation to approve or modify it. Approval would mean that some employers could see a decrease in their premiums.
NCCI approved loss costs are available to insurers to reference when filing their workers’ compensation rates with the Bureau of Insurance. Maine currently has a reportedly competitive market for workers’ compensation insurance and each insurer will set its own rate level. Each insurer may modify the NCCI loss costs and must select its own expense and profit factor in setting its rates.
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