Maine businesses could save as much as $27 million this year thanks to a projected decline in workers’ compensation insurance claims.
Maine Superintendent of Insurance Eric Cioppa said Tuesday he approved a 12 percent average decrease in expected workers’ compensation loss costs in Maine. The approval of the National Council on Compensation Insurance, Inc.’s (NCCI) 2018 loss costs for Maine, filed earlier this year, which proposed an average loss cost decrease of 12 percent. The new NCCI loss costs go into effect for new and renewing policies as of April 1, 2018.
Loss costs are based on previous and projected losses and benefit payments. NCCI is the advisory rating organization for insurance companies that offer workers’ compensation coverage in Maine. NCCI-approved loss costs are available to insurers to reference when filing their workers’ compensation rates with the Bureau of Insurance.
The 12 percent decrease is an average loss costs change, which ranges from -10.4 to -15.1 percent depending on the industry group. This is an average decrease so some individual businesses will experience increases while the majority will experience decreases. The loss cost decrease is also only a recommended decrease, and it is up to the individual insurers to decide whether to accept the proposed change in loss costs.
The Superintendent noted that recently filed NCCI loss costs represent a cumulative decrease of 59.5 percent since the 1992 workers’ compensation reform, and that if all insurers fully adopt the decrease, Maine businesses could save an estimated $27 million in the year following implementation.
Cioppa said the decrease should result in lower workers’ compensation premiums on average across all industry groups.
“Maine employers’ efforts to improve workplace safety, return injured workers to their jobs in a timely manner, and control medical costs continues to pay off,” Cioppa stated. “This most recent decrease should result in lower workers’ compensation premiums on average across all industry groups.”
Maine has a competitive market for workers’ compensation insurance and each insurer sets its own rate level. Insurers may modify the NCCI loss costs and must select their own expense and profit factor in setting rates.
The superintendent said there will only be a decrease in costs if individual insurers accept the proposed change.
Maine’s largest workers’ compensation insurance company The MEMIC Group said it will adopt the rate recommendation. Company CEO Michael P. Bourque said it amounts to the largest rate reduction in more than 20 years.
He cited safer workplaces and prompt return-to-work policies as factors in reduced rates.
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