OIR Order Seeks Lower Workers Compensation Rates
The Office of Insurance Regulation issued an Order disapproving a statewide average rate decrease of 3.3% for workers compensation insurance filed by the National Council on Compensation Insurance (NCCI). However, in doing so, the OIR specified revisions NCCI can make that will result in approval of a filing with a statewide average decrease of 5.2%.
NCCI submits a rate filing annually to the Office of Insurance Regulation. This year, NCCI filed for a 2.5% decrease in August but later amended the filing to provide for a 3.3% decrease. The OIR reviewed the filing and conducted a public hearing in October to further evaluate the proposed rates. As a result of this review, the OIR concluded that NCCI had not fully justified certain components of the rate filing. The OIR listed its findings in these areas in its Order, including that the selected medical trend had not been justified, the proposed profit and contingency factor was too high, the selected investment yield was too low, and the selected increase in production expenses was too high.
Although the OIR’s order disapproves the rates as filed, the OIR indicated it will approve a revised filing making the changes it identified in the Order. Assuming these changes are made, the statewide average decrease will be 5.2%. The OIR points out in the Order that in order to allow sufficient time for the revised rates to be implemented for January 1, 2015, renewals, the revised NCCI filing must be received by November 11.