This morning (October 31st) NCCI released its circular announcing that it has submitted a voluntary advisory loss costs, rating values and voluntary retrospective rating plan parameters filing to the Louisiana Department of Insurance. This filing proposes an overall average loss cost level decrease of 2.4% for the voluntary market to become effective on May 1st, 2015.
As key observations to support its recommendations, NCCI offered the following general analyses based on adjusted data through 2012:
- After increasing in 2010, lost time claim frequency decreased in 2011 and 2012.
- The filing is based on premium and loss experience for policy years 2011 and 2012. Both policy years show favorable experience.
- Medical severity increased significantly after declining in policy year 2011.
The last five years of lost cost level changes (all effective 5/1) via NCCI recommendations were:
- 2014: -5.1%
- 2013: 2.5%
- 2012: 6%
- 2011: 4.2%
- 2010: -4.3%
The overall rate change was considered relatively ordinary by SIF administrators. Troy Prevot, Administrator of LCTA, explained, “This decrease was expected due to past trends and the continued decline in frequency of injuries, which is a large part of how NCCI calculates the rate recommendation. This is good for employers and it shows they are doing a good job with job site safety.”
Mark Tullis, Administrator of LCI Workers’ Comp, agreed with the progress in safety across the state. “NCCI’s data shows that claims frequency continues to decline thanks to Louisiana businesses continuing to adopt strong safety practices, including the implementation of new technologies,” said Tullis. “And because of the highly competitive workers’ comp market in Louisiana, where as many as a dozen home grown workers’ comp providers will fight for a company’s comp business, pricing is following frequency, all adding up to Louisiana businesses being the big winner. It shows that the competitive system can work.”
NCCI will host its State Advisory Forum discussing their proposal on November 20th at the Marriott Baton Rouge (5500 Hilton Ave) from 9-noon. Louisiana Comp Blog will be covering the event.