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Showing posts with label National Council on Compensation Insurance. Show all posts
Showing posts with label National Council on Compensation Insurance. Show all posts

Monday, August 25, 2014

The Father of the 11th Circuit Court Decision

Today's post is authored by Peter Rousmaniere and shared from workcompcentral.com
The Florida 11th Circuit Court decision on Aug. 13 appears to be the first state court decision in many years to declare an entire workers’ compensation statute as unconstitutional. The fingerprints of the Dean of Workers’ Compensation Research John Burton are all over Judge Jorge Cueto’s reasoning.
Since the 1970s, Burton, with a law degree and PhD in economics, has been the leading academic scholar in workers’ compensation, even now years after his retirement from a faculty position at Rutgers University. Burton surely thinks that this decision is long coming. So, what’s his complaint?
Cueto wrote that through the years, the state has cut back permanent partial disability benefits so severely that the state “no longer provides any benefits for this class of disabled worker.”
 Burton’s writings indicate that he holds that whatever permanent disability benefits there are in Florida, they are so low and PPD so significant, that the entire workers’ comp system in Florida is inadequate. Cueto agrees.
He cites National Council on Compensation Insurance estimates that legislative changes in 1979, 1990, 1994 and 2003 cut PPD benefits severely. Per Burton, Florida “eviscerated the permanent partial benefit system.” The current benefits are “less than available during the 1970s and markedly lower than...
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Tuesday, November 26, 2013

NJ Workers Compensation Rates 2014

Revision of Rates and Rating Values – Effective January 1, 2014

The Commissioner of Banking and Insurance (“Commissioner”) has approved a 3.6%
increase in rates and rating values applicable to New Jersey workers compensation and employers
liability insurance effective January 1, 2014 on a new and renewal basis. The rating components of the increase are summarized below.

PREMIUM AND LOSS EXPERIENCE

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 0.979 (-2.1%) due to experience.

A trend factor of 1.055 (+5.5%) is included to recognize changing exposures and losses.

BENEFIT CHANGES

Effective January 1, 2014, the maximum weekly benefit with respect to all types of injuries,
except permanent partial disabilities, will be changed from $826 to $843. The minimum weekly benefit will be changed from $220 to $225. In cases involving permanent partial disabilities, the present maximum weekly benefits ranging from $220 to $826, varying on the basis of duration of disability, will be changed to $225 and $843, 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 1.007 (+0.7%) due to benefits.
EXPENSES

 There is need for decreases in the provisions for Loss Adjustment Expense, the Security
Fund and Bureau Expense. The changes to the expense provisions result in a premium level adjustment factor of 0.996 (-0.4%).

OVERALL PREMIUM/RATE LEVEL CHANGE

The combined effect of the above adjustment factors results in an indicated premium level
adjustment factor of 1.036 (+3.6%). The rate level adjustment is also an increase of +3.6%.

CATASTROPHE PROVISIONS

 A Terrorism Premium Charge of $0.03 per unit of exposure applies to all policies except
for the exclusions in 3:9-2 and 3:9-5 of the Manual. Upward deviation from the $0.03 rate is
permissible.

 A Catastrophe (Other than Certified Acts of Terrorism) Premium Charge of $0.01 per
unit of exposure applies to all policies except for the exclusions in 3:9-9 and 3:9-12 of the Manual.

CLASSIFICATION RATES

 The adjustment of classification rate relativity is based on the policy experience for 2006
through 2010, as reported through the Statistical Plan. The changes in the rates for the individual
classifications including those in the Admiralty and Federal Employers Liability Act coverage are
supported by, and derived from, the experience.

There are 572 classifications in the Manual effective January 1, 2014 including the codes to
accommodate Federal employments. Eight classifications carry no rate assignment. Of the remainder, 381 will experience increased rates, the rates for 167 classes will decrease, and 16 are unchanged. There are no changes to the annual policy charges for private estate or residence employees as set forth in 3:5-12 of the Manual.

In order to comply with the decision of the Commissioner, changes in manual rates for any
classification have been limited to an increase of 15% from last year’s rate. The increase percentage applicable to non "F" classifications when coverage is provided under the United States Longshore and Harbor Workers Compensation Act remains unchanged at 50%.

MINIMUM PREMIUM FORMULA

 The minimum premium multiplier is increased from 100 to 150 and the maximum
minimum premium is increased from $850 to $900. The change to premium resulting from the new
rating values in the minimum premium formula is minimal and does not impact the overall rate level.
Special minimum premiums applicable to private residence classifications and to classifications subject  to Maritime or Federal Employers Liability Act coverage are not affected.

SURCHARGES

 New Jersey law mandates application of separate policyholder surcharges to finance the
Second Injury and Uninsured Employers’ Funds. Based on the Department of Labor and Workforce
Development’s estimate of 2014 Fund requirements, the policyholder surcharge percentages effective January 1, 2014, on a new and renewal basis to be applied to the modified premium are:
Second Injury Fund 6.56%
Uninsured Employers’ Fund 0.00%

Tuesday, November 19, 2013

John Burton Reports on Workers' Compensation Insurance Industry Underwriting Results

 Issue 7 of the Workers’ Compensation Resources Research Report examines the profitability of the workers’ compensation insurance industry in 2012 as reported by A.M. Best. The operating ratio, which is the most comprehensive measure of underwriting results because it considers investment income, decreased from 100.4 in 2011 to 93.8 in 2012.  An operating ratio of greater than 100 indicates that the industry is not profitable, and thus the industry was unprofitable in 2011.  An operating ratio of less than 100 indicates that the workers’ compensation insurance industry is profitable, and thus the industry was profitable in 2012.  The operating ratio of 93.8 in 2012 means the industry earned $6.20 of profits for every $100 of net premiums.

The operating ratio has usually been less than 100 in recent decades, indicating that the workers’ compensation insurance industry has generally been profitable when investment income earned by insurance carriers is considered.  Since 1993, the insurance industry has been profitable in 16 of the 19 years – all but 2001, 2002, and 2011.

An order form for Issue 7 of the WCRRR can be downloaded from www.workerscompresources.com

Monday, November 11, 2013

Workers' compensation claims drop in Louisiana

Today's post is shared from thetowntalk.com

A national group is recommending that Louisiana reduce workers' compensation rates by 5 percent because of fewer workplace claims among other factors.

The Times-Picayune of New Orleans reports that the National Council on Compensation Insurance has filed documents with the Louisiana Department of Insurance saying businesses in the state should pay lower rates because workers' compensation claims declined in 2011.
According to the Louisiana Workforce Commission, employers across the state saw lighter losses in 2010 and 2011.

The NCCI says those improvements can be attributed to a decrease in the number of workplace injuries and a reduction in the average cost per claim.

The NCCI recommends additional cuts in manufacturing by 7 percent, contracting by 5 percent, office and clerical by 6 percent, goods and services by 6 percent and miscellaneous industry groups by about 3 percent.

If the insurance department adopts the lower rates, they would take effect May 14.
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Wednesday, October 23, 2013

Florida rejects workers' compensation rate hike

Workers' compensation insurance has been stressed under the on going US economic downturn. lower premiums, which are based on payrolls, and increasing medical costs, are significant causes. Despite the pressure of NCCI to increase the cost dramatically, FL has officially rejected that proposal. Today's post is shared from naplesnews.com.

Florida regulators are rejecting a proposed 1 percent hike in workers compensation insurance rates.
Insurance Commissioner Kevin McCarty on Wednesday announced that he won't approve the hike that had been requested by insurers that provide coverage for on-the-job injuries.
But McCarty says that his office would approve a slightly lower hike 0.7 percent if insurers resubmitted their request.
That hike on employers would take effect on Jan. 1.
If the hike is ultimately approved it would make the fourth straight year that workers' compensation insurance rates have increased.
The rate hike proposal was submitted by the National Council on Compensation Insurance. The council is a rating and data collection agency owned by insurance companies. It submits rate filings on their behalf.
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Monday, September 16, 2013

Legislators consider workers’ comp changes

Wisconsin Republicans look toward limiting workers' compensation benefits.Today's post was shared by WCBlog and comes from lacrossetribune.com


Wisconsin surgeons performing the same arthroscopic knee surgery on two groups of patients in recent years collected on average $1,573 from one group and $3,728 from the other.

The difference? The lower amount came from those with a group health insurance policy, while the higher amount came from those injured on the job and covered under the state’s workers’ compensation system.

The price discrepancy, reported in a recent study of medical payments in Wisconsin, is fueling discussion about the cost to businesses of workers’ comp insurance. In an unusual move, several Republican lawmakers are considering changes to the system.

Wisconsin’s workers’ compensation system is considered one of the best in the country. Injured workers can access quality health care and return to work quickly, keeping costs low.

The average duration of workers’ comp benefits is 60 days, the shortest of all the states and half the national average, according to recently published data from the National Council on Compensation Insurance.

Typically the state’s Workers’ Compensation Advisory Council, with representation from management and labor, sets workers’ comp policy by bargaining changes and recommending bills to the Legislature. Lawmakers often adopt the proposals without changes in order to insulate the system from political swings in leadership
But Republican legislators led by Rep. Dan Knodl, R-Germantown, are reviewing of the issue as part of...
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Wednesday, October 26, 2011

Florida Deems NCCI Rate Request Flawed

Florida ruled that the rate request from NCCI (National Council on Compensation Insurance, Inc.) was based on a flawed calculation. Nevertheless, the State of Florida did rule that the workers' compensation rates would increase 8.9% effective January 1, 2012.

"Commissioner McCarty’s Order is technically a denial of NCCI's rate filing. The Office did not accept NCCI’s methodology for input parameters including policyholder dividends, the loading for these dividends, and investment yields. The Office also did not accept specific rate changes for certain classes, specifically the "F" classes for workers covered by the Federal Acts, classification code 5551 (roofers), and classification code 7705 (Ambulance and EMS providers). The Office also disapproved the proposed increase in minimum premiums."

The Sunshine State has take a very serious economic downturn following the collapse of the real estate market over the past few years. When one drives through southern Florida you can detect that the only industry that is booming is the signage companies that print the "For Lease" and "For Rent" signs that have proliferated throughout the region.

NCCI provides rate information for the majority of States where workers' compensation is written. The availability of rating data is somewhat restricted. 

The news of increased workers' compensation rates, compounded by recent real estate taxes increases, is not good news for the staggering Florida economy that by luck this year missed the impact of severe hurricane season. Should that change in 2012, the increased to be assessed in 2012 may produce a defining moment for the  entire workers' compensation program in that state.