Maryland workers’ compensation carriers will be able to lower their rates an average 5.4 percent under a loss cost filing approved by the state’s regulator.
The Maryland Insurance Administration this week gave its nod to the rate changes that can be put into effective Jan. 1, 2009 as requested by the statistical organization, the National Council on Compensation Insurance, on behalf of insurers.
The voluntary market filing is advisory only; individual insurers can decide whether or how to apply it to their own pricing.
The overall approved decrease in loss costs of 5.4 percent represents about $37 million in savings.
By industry group, the 5.4 percent average breaks down as a 0.7 percent drop for manufacturers; a 6.7 percent drop for contractors; a 11.7 percent drop in the office and clerical classification; a 5.7 percent drop for employers in goods and services and a 0.3 percent increase for miscellaneous classes. Coal mine classifications face a 2.2 percent increase in loss costs.
Loss costs also went down in January 2008 by about 1.7 percent on average.
NCCI said the lower costs could be attributed to fewer claims being filed.
“This decrease is due in large part to a continued decline in frequency of claims; however, medical costs continue to increase across the country and there are early signs that indemnity costs may no longer continue in their favorable downward direction,” NCCI said in its filing.
The organization advised that “continued diligence is needed by Maryland workers compensation stakeholders to ensure the system remains strong and competitive.”
The state’s total workers’ compensation market declined slightly in 2007. In 2007, insurers, excluding the Injured Worker Insurance Fund, reported $681 million in written premium, compared to $693.1 million in 2006.
Five insurers write just more than half of the workers compensation market in the state. The Hartford is the leading writer with a 14.8 percent market share. The others are AIG (11.4%); Liberty Mutual (11.1%); St. Paul Travelers (7.3%) and Erie Insurance (6.5%).
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