Workers comp insurance rates drop for ninth time
PARKERSBURG – Workers compensation premiums will decrease as the result of a National Council on Compensation Insurance decision, the governor’s office said.
The council for the ninth consecutive time reduced the workers’ compensation loss cost rates in West Virginia, Gov. Earl Ray Tomblin said.
“With this reduction, West Virginia employers will have saved $250 million since workers’ compensation privatization,” Tomblin said. “These savings demonstrate our willingness to address problems, within the workers’ compensation market years ago, was the right decision for West Virginia employers and employees.”
The council proposed an 8.8 percent overall decrease with the West Virginia Insurance Commissioner, which will result in $36 million of projected premium reductions for West Virginia employers. The new loss cost rate is effective Nov. 1. In addition, the council filed an 8.5 percent rate decrease in the residual market as part of the filing.
“Since West Virginia privatized our workers’ compensation system, manufacturers have continued to see their premiums reduced. Our members work hard to protect the safety of their employees and this announcement reinforces their efforts,” Karen Price, president of the West Virginia Manufacturers Association, said. “Additionally, reductions in our workers’ compensation contributes to our ever improving business climate.”
The reductions are encouraging, said Jan Vineyard, president of the West Virginia Oil Marketers and Grocers Association, the West Virginia Trucking Association and the West Virginia Wholesalers Association.
“This is an indication that our workplaces are becoming safer and that our businesses continue to make their employees a priority,” Vineyard said. “The other good news is that our businesses are able to take workers’ compensation savings and invest them back into their businesses. This is another example that West Virginia is heading in the right direction.”
Loss cost is the estimated amount necessary to pay all medical and indemnity costs associated with workers’ compensation claims. All workers’ compensation insurance carriers use loss cost to calculate rates.
As the ninth consecutive decrease in loss costs since privatization, it accounts for a cumulative decrease of 48.1 percent from pre-reform levels.
This proposed loss cost reduction follows the reduction in the workers’ compensation regulatory surcharge from 5.5 percent to 5 percent that was effective on Jan. 1, which will result in further cost savings to West Virginia employers.
The council is the rating and statistical agent for West Virginia that calculates and files the loss cost based on an actuarial analysis.