NCCI Criticizes AP Report on S.C. Workers’ Comp As ‘Factually Incorrect’

December 19, 2005

The National Council on Compensation Insurance Inc. has criticized recent Associated Press articles discussing NCCI’s review of the South Carolina Governor’s Workers Compensation Task Force proposal as being factually incorrect in several essential areas, according to Peter M. Burton, senior division executive of State Relations.

“The article stated that NCCI reviewed and criticized the Task Force’s final proposal for reforming the state’s workers compensation system,” Burton said. “In fact, NCCI received a final copy of the Task Force’s proposal for review the day after the article appeared. Our actuaries have only begun their analysis.

“The document the article referenced was an internal working paper that commented on preliminary, undeveloped concepts being considered by the Task Force during the early stages of their deliberations, not their final product.”

Burton said that additionally, the reporter’s interpretation of NCCI’s Second Injury Fund closure analysis is flawed.

“Since NCCI is the state’s designated Workers Compensation Rating Organization, we advise the state as to the appropriate level of loss costs,” Burton explained. “SIF claim costs and administration are currently funded through assessments to each carrier and are reflected in a carrier’s loss cost multiplier.

“Individual insurance carriers determine their own unique loss cost multipliers, factors that affect their final rate and often do dramatically change the final premium from carrier to carrier,” he said. “If a carrier no longer needed to allow for Second Injury Fund assessments when setting its LCM, there may be downward pressure on that component of the carrier’s rates.”

Burton said that, being on the front line of exposures in the market place, carriers and self insurers are often able to identify emerging claim trends before supportive data is available to NCCI. For instance, South Carolina carriers and self insurers are seeing alarming increases in repetitive trauma cases.

“Accordingly, the Governor’s Task Force proactively addressed this topic, just one example of the group’s successful efforts,” Burton said. “NCCI applauds the Governor and his Workers Compensation Task Force for their commitment to address South Carolina’s workers compensation system and for making reform a top priority in 2006.”

Burton said NCCI will remain an unbiased technical resource to the Task Force, as well as other groups that may submit legislation in the upcoming session.

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