Major Workers’ Compensation Rate Reduction Proposed
Connecticut employers could see a major reduction in workers’ compensation premium rates next year, the second consecutive year of double-digit declines.
The National Council on Compensation Insurance, which analyzes and recommends rates in more than 40 states, filed a 14.1% overall average rate reduction for the voluntary market with Connecticut regulators.
NCCI’s September filing with the Connecticut Insurance Department also includes a proposed 12.6% overall reduction for the assigned risk market.
The council is recommending the department approve both rate reductions, which would be effective for policies renewing on or after January 1, 2018.
CBIA counsel Louise DiCocco urged regulators to approve NCCI’s recommendations.
“Workers’ compensation insurance represents a significant cost for Connecticut businesses, large and small,” DiCocco said.
Recommended rate reductions vary by industry classification, ranging from 17% for office and clerical to -12.5% for goods and services in the voluntary market and from 15.6% to 10.9% in assigned risk for the same sectors.
Manufacturers could see a 14.7% reduction in the voluntary market and 13.2% in assigned risk.
Claim Frequency Declines
NCCI cited Connecticut’s continuing decline in claim frequency, which has decreased consistently since 2010. The state’s loss ratio history also declined over the same period.
The council reported that workers’ compensation claims dropped five straight years in Connecticut through 2015.
Per case indemnity costs were up slightly to $31,964 in 2015 from $31,271 in 2014.
With many other business costs increasing, NCCI's recommendation to lower rates is welcome news.
The department is holding a 30-day public comment period, effective Sept. 26, on the rate filing request.
"With many other business costs increasing, NCCI's recommendation to lower rates is welcome news for the state's employers," DiCocco said.
The department approved NCCI's recommended 10.9% overall rate reduction for both markets last year. Rates dropped 3.9% in 2015 and 0.6% in 2014 following five consecutive years of increases.
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