The National Council on Compensation Insurance has put forward recommended decreases in workers’ compensation rates for voluntary and assigned-risk markets in two states.
The NCCI is proposing an overall rate decrease of 2.2% for these markets in Arizona, and a loss cost level decrease of 7.8% in Mississippi.
The Arizona recommendation was made at the state’s Advisory Forum presentation late last week. If accepted, it would take place January 1 and follow rate decreases of 3.2% in 2014 and 6% in 2015. It comes as employers in the state have managed to cut average lost-time claim frequency to among the lowest in the region, with just 647 claims per 100,000 workers.
That compares favorably to Nevada’s average lost-time claim frequency of 1,078 claims per 100,000 workers and Colorado’s average of 986 per 100,000.
Last year, the state’s combine ratio leapt 10 percentage points to 96%.
Arizona also stands out in another way. While indemnity benefits represent roughly 41% of total benefits costs nationwide and medical benefits represent 59%, benefits in the state are comprised of 76% medical and 24% indemnity.
In Mississippi, the proposed 7.9% cut would take effect March 1 and follows two previous rate decreases – a 3.2% decrease for the voluntary market and 1.6% decrease for the assigned-risk market in 2015, and a 3.8% cut for both markets the previous year.
Mississippi’s combined ratio was 95% in 2014, an improvement from 2013’s 101% and 2012’s 104%. Indemnity benefits in the state comprise 39% of total benefit costs, while medical benefits make up 61% - on par with the rest of the region.
The filed proposals are now under review with both state insurance departments.
