Workers' comp rate decrease proposed in West Virginia
The Mountain State is not the only one with workers’ comp rates drop, as other states are seeing similar filings.
The National Council on Compensation Insurance (NCCI), which serves as West Virginia’s rating and statistical agent, has filed a proposed workers’ compensation loss cost decrease of 7.9%. The premium reduction would be effective Nov. 1, 2021, resulting in a projected $15 million in savings to employers in the state, according to a release from the West Virginia Offices of the Insurance Commissioner.
The filing was based on experience data as of year-end 2020 from policy years covering 2017, 2018 and 2019, NCCI’s State Relations Executive David Benedict tells PropertyCasualty360.com, adding all three policy years showed favorable loss experiences. He notes other states are seeing similar filings with proposed rate decreases.
“The loss cost decrease is primarily driven by changes in lost-time claim frequency, which has continually declined since 2010,” Benedict says. “The lower proposed overall average assigned risk rate level reflects the observed improvement in the assigned risk market experience and lower assigned risk expenses.”
The state’s workers’ compensation program was privatized in 2006, and since then, the market has experienced approximately $432 million in premium savings. According to the press release, the latest filing represents the 17th consecutive year of loss cost decreases and accounts for a cumulative 79% reduction from pre-reform workers’ compensation levels.
The continuation of decreases for the past 17 years is in large part due to declining frequency and favorable claims experiences, Benedict reports.
The loss cost decrease of 7.9% applies to all standard classifications, but a proposed 9.8% rate decrease for the assigned risk market has also been filed with the West Virginia Offices of the Insurance Commissioner.
As with its last annual loss cost/rate filings, NCCI again excluded explicit adjustments for the potential impact of the pandemic. However, future filings could be reflected in future filings as NCCI recently determined a catastrophe provision would be the best way to reflect exposure from pandemics.
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