The Commissioner of Banking and Insurance (“Commissioner”) has approved a 3.0% decrease in rates and rating values applicable to New Jersey workers compensation and employers liability insurance effective January 1, 2017 on a new and renewal basis. The rating components of the decrease are summarized below.
EXPERIENCE AND TREND: Analysis of data for the latest two complete policy years and the latest calendar-accident year, following adjustment to present premium and benefit levels, using paid and incurred losses separately, indicates a premium level adjustment factor of 0.911 (-8.9%) due to experience. A trend factor of 1.025 (+2.5%) is included to recognize changing exposures and losses.
BENEFIT CHANGES: Effective January 1, 2017, the maximum weekly benefit with respect to all types of injuries, except permanent partial disabilities, will be changed from $871 to $896. The minimum weekly benefit will be changed from $232 to $239. In cases involving permanent partial disabilities, the present maximum weekly benefits ranging from $232 to $871, varying on the basis of duration of disability, will be changed to $239 and $896, respectively. The minimum weekly benefit for permanent partial injuries will remain at $35. The effect of the changes to the minimum and maximum weekly benefits results in a premium level adjustment factor of 1.010 (+1.0%) due to benefits.
EXPENSES: There is need for a change in the provisions for Loss Adjustment Expense, General Expense and Production Expense. The combined effect of the changes to the expense provisions results in a premium level adjustment factor of 1.029 (+2.9%).
SURCHARGES: New Jersey law mandates application of separate policyholder surcharges to finance the Second Injury Fund and Uninsured Employers’ Fund. Based on the Department of Labor and Workforce Development’s estimate of 2017 Fund requirements, the policyholder surcharge percentages effective January 1, 2017, on a new and renewal basis to be applied to the modified premium are:
- Second Injury Fund 5.00%
- Uninsured Employers’ Fund 0.08%
Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thomson-Reuters).