Despite the industry’s reported request for steep increases in workers’ compensation rates, North Carolina businesses stand to save a potential $92 million due to a lower negotiated rate, Insurance Commissioner Jim Long announced. Long signed a settlement agreement this week that sets workers’ compensation rates 1 percent lower for the voluntary market and only 5 percent higher for assigned risk rates.
The settlement comes after weeks of negotiations with the organization that represents all workers’ compensation insurance companies in the state, the North Carolina Rate Bureau (NCRB). The NCRB files for rate changes on behalf of its member companies; the Department of Insurance, headed by Long, must review any proposed change and approve it.
This year the NCRB requested an 8.2 percent increase in rates for voluntary loss costs and a 19.5 percent increase for the assigned risk rates. Long expressed satisfaction in the lower numbers agreed upon.
“Over the years, the Rate Bureau and I have bumped heads over just what kind of rate changes are appropriate for the workers’ compensation industry,” he said. “It’s always a pleasure to negotiate a rate that we both can be satisfied with – and more than $90 million in savings to North Carolina businesses over the original proposed rate change definitely makes me happy.”
Workers’ compensation business is split into two categories – voluntary market and assigned risk.
The voluntary market refers to policies sold voluntarily to businesses. The assigned risk policies are sold to businesses that may not be as attractive to insurance companies and are considered to be a higher risk. Because businesses are required to carry workers’ compensation insurance, insurance companies must offer policies to these “unattractive” businesses. They do so by offering policies in the assigned risk category.
Was this article valuable?
Here are more articles you may enjoy.