WASHINGTON–Employers in Virginia will get refunds amounting to $1-to-$1.2 million in November on their workers' compensation premiums as a result of a computer glitch at the National Council on Compensation Insurance, state regulators confirmed Friday.
The problem, which also developed in five other states, stemmed from calculations for loss costs and assigned-risk rates in 32 classifications based on incomplete payroll data in the Virginia NCCI applications approved effective April 1, 2003, April 1, 2004 and April 1, 2005, according to Mary M. Bannister, Virginia deputy insurance commissioner.
Ms. Bannister revealed the situation in a May 16 memo to all insurers licensed to write workers' compensation in the state.
Andy Farmer, a spokesman for the Virginia State Corporation Commission, the parent agency of the Virginia Bureau of Insurance, confirmed the information.
The refund is estimated at between $1 million and $1.2 million, Mr. Farmer said. He explained that it is an estimate because it is based on deposit premiums and policies which have not been audited.
The final number will not be available until Nov. 1, he said. The state estimates that individual refunds will range from $1 to as much as $12,950, but that the vast majority of the refunds will be below $500. The money will be credited to premiums for the subsequent period, he said.
Virginia is one of at least six states to order refunds since New Hampshire regulators alerted NCCI to the problem in 2004.
Auditors found problems in the way the NCCI computer system interpreted unit statistical reports for certain classification codes.
NCCI since has alerted all 36 states for which it calculates loss costs.Maine, Missouri, New Hampshire and Vermont have issued public statements and ordered NCCI to recalculate premiums paid in the 2003, 2004 and 2005 policy years. Arkansas, Georgia, Mississippi, North Carolina and South Carolina have allowed NCCI to adjust for the problem in subsequent rate filings and go forward.
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