Gov. Earl Ray Tomblin today announced the National Council on Compensation Insurance (NCCI) filed a reduction in workers' compensation loss cost rates with the West Virginia Insurance Commissioner.
The NCCI proposed an overall decrease of 9.1 percent, effective November 1, 2012. This filing will result in projected premium reductions of $37 million for West Virginia employers and an annual overall premium savings of $207 million resulting from the 2006 workers' compensation reform. In addition, NCCI filed a 14.3 percent rate decrease in the residual market as part of this filing.
"We've done a lot in recent years to reduce the cost of doing business in West Virginia and now our businesses are reaping the rewards of both lower taxes and lower workers' compensation insurance premiums," Gov. Tomblin said. "These new rates, and subsequent financial savings for our businesses, are an excellent sign that our state continues to move in the right direction for continued job growth."
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 eighth consecutive decrease in loss cost rates since privatization and accounts for a cumulative decrease of 60.9 percent from pre-reform levels.
"This decrease is a direct result of the improvement West Virginia experienced in claims from 2010-2011," said West Virginia Insurance Commissioner Michael D. Riley.
This proposed loss cost reduction follows the recently announced reduction in the workers' compensation regulatory surcharge from 5.5 percent to 5 percent, 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.