A 2008 filing most insurance carriers will use to develop rates for workers’ compensation coverage shows the third straight decrease in loss costs, Insurance Commissioner Sharon P. Clark announced.
The loss cost figures show an average reduction of 5.1 percent for the 596 industrial classes used in Kentucky. These classes include manufacturing, office and clerical, contracting, and goods and services. For coal classes, underground mining costs dropped 10.5 percent while surface mining decreased 8.7 percent.
The filing, approved by the state Department of Insurance and effective Oct. 1, was submitted by the National Council on Compensation Insurance Inc. (NCCI) on behalf of insurers.
“As businesses face tough economic times, this is a welcome piece of news,” said Clark. “Workers’ compensation insurance is a large cost of doing business. This also is good news for hardworking Kentuckians since the report shows a continuing decline in the number of workplace injuries and a slight decline in the severity of those claims.”
Data collected from insurance carriers is used to develop loss costs, which is the average compensation for lost wages, based on the level of disability, plus medical benefit payments. Use of the information is voluntary but most workers’ compensation carriers use the NCCI loss cost values as a base to which the insurer’s own loss adjustment and overhead expenses are added to arrive at the rates charged to Kentucky employers.
Source: KENTUCKY PUBLIC PROTECTION CABINET
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