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Repair MenCost pressures are improving in the field of workers compensation, as the National Council on Compensation Insurance Inc. (NCCI) is set to recommend more decreases in state workers comp rates for next year.

Despite the positive signs of an improving workers compensation market, specifically with better underwriting policies, increasing premiums and a national decline in claim frequency, NCCI's recommendations probably won't lead to lower pricing for employers.

So far this year, NCCI has submitted workers comp advisory rate filings in 20 states this year.

15 out of the 20 have been for rate decreases and four have been for increases according to Peter Burton, Wayne, Pennsylvania-based senior division executive for state relations at NCCI. Additionally, they requested rates remain the same in Colorado for 2015.

"The state insurance rates are simply guidelines ... and (insurers) — in the majority of cases, not all — have the ability to deviate from that rate by more than 25% of the state suggested rate," said Eric Silverstein, Dallas-based senior vice president and risk management practice leader at Lockton LLC.

NCCI has had some of its requested decreases approved. Illinois adopted a 5.5 % decrease in workers comp rates for next year, while Oklahoma (proposed 7.8 % decrease) is strongly considering the option after the state began allowing employers to opt out of the workers compensation system this year and Florida is also considering a 2.5 % decrease, the first potential cut in 4 years in the state.

Mr. Burton said he's "optimistic that the majority of our filings will be approved as proposed."

This could be the first time in several years that the NCCI advisory rates include more decreases than increases.

Nevertheless, these projections do not necessarily mean all companies will see lower workers compensation rates.

Smaller companies typically have rates tied closely to state rates as a result of a lack of claims data that can be analyzed for customized pricing. On the other hand, bigger companies often see workers compensation policy rates fall with state rates because they have vast quantities of claims information that can be used to present a favorable risk profile to insurers.

Protect your employees. Call Prestige Insurance Group, Inc. at (305) 969-8776 for more information on Miami workers compensation insurance.

(Article courtesy: Brent Harrison via Insurance Business America)
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