West Virginia employers to save $36 million
CHARLESTON, W.Va. – Gov. Earl Ray Tomblin today announced West Virginia has received a reduction in workers’ compensation loss cost rates from the National Council on Compensation Insurance (NCCI).
“With this reduction, West Virginia employers will have saved $250 million since workers’ compensation privatization,” said Gov. Tomblin. “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.”
NCCI filed a proposed 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 November 1, 2013. In addition, NCCI 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,” said Karen Price, President of the West Virginia Manufacturers Association. “Additionally, reductions in our workers' compensation contributes to our ever improving business climate.”
“We are encouraged by the announcement that workers' compensation rates are going down. This is an indication that our workplaces are becoming safer and that our businesses continue to make their employees a priority,” said Jan Vineyard, President of the W.Va. Oil Marketers and Grocers Association, W.Va. Trucking Association, and W.Va. Wholesalers Association. “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.
This serves as the ninth consecutive decrease in loss costs since privatization and 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 effective January 1, 2013, which will result in further cost savings to West Virginia employers.
NCCI is West Virginia’s rating and statistical agent that calculates and files the loss cost based on an actuarial analysis.