Workers’ compensation loss costs are going down in West Virginia for the ninth consecutive year since the market was privatized.
The National Council on Compensation Insurance (NCC), which files rates on behalf of insurers, filed a proposed 8.8 percent overall decrease, worth about $36 million of projected premium reductions for West Virginia employers. The new loss cost rate is effective November 1, 2013.
In addition, NCCI filed an 8.5 percent rate decrease in the residual market as part of the filing.
Loss cost is the estimated amount necessary to pay all medical and indemnity costs associated with workers’ compensation claims. All workers’ compensation insurance carriers use loss cost to calculate rates.
This serves as the ninth consecutive decrease in loss costs since privatization and accounts for a cumulative decrease of 48.1 percent from pre-reform levels.
This proposed loss cost reduction follows the reduction in the workers’ compensation regulatory surcharge from 5.5 percent to 5 percent effective January 1, 2013, which will result in further cost savings to West Virginia employers.
Gov. Earl Ray Tomblin said the filing proves privatization was the right policy.
“With this reduction, West Virginia employers will have saved $250 million since workers’ compensation privatization,” said Tomblin. “These savings demonstrate our willingness to address problems, within the workers’ compensation market years ago, was the right decision for West Virginia employers and employees.”
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