Comp premium rate hike requested for Indiana, but Tenn. rate to decreasePosted On: Sep. 28, 2015 12:00 AM CST
The National Council on Compensation Insurance Inc. has filed for a workers compensation rate increase in Indiana and a decrease in Tennessee.
Boca Raton, Florida-based NCCI has proposed a 3.2% overall rate increase to Indiana's voluntary and assigned risk markets, to take effect on Jan. 1, 2016.
The recommended increase comes after a 3.7% rate cut in 2015 and a 7.7% rate cut in 2014, the Indiana Compensation Rating Bureau said in a statement last week.
Nearly 75% of Indiana's total benefit costs are medical, which is higher than most other states, NCCI said in the filing dated Sept. 21.
The state's average medical costs have increased steadily since 2006, when the average medical cost per claim was $22,883, according to the filing. The average cost in 2013, the most recently available full policy year, was $35,953.
On the other hand, indemnity benefits, which are wage replacement benefits, are expected to increase at a slower pace than workers' wages, the filing states. The average indemnity cost per claim in 2013 was $13,875, compared with $12,919 in 2006.
NCCI is also proposing a 1.3% increase to the overall voluntary loss cost level.
Carriers offering workers compensation insurance in Indiana may adopt the advisory rates, deviate from the advisory rates, or adopt the advisory loss costs to which they would apply their own expense provisions, according to the filing.
Meanwhile, at its Tennessee Advisory Forum presentation on Tuesday, NCCI recommended an overall loss cost level decrease of 0.9%, which would take effect March 1.
Opt out legislation in the state didn't pass this year, but will likely be pursued in 2016, NCCI said in its presentation.
While indemnity and medical severity have increased in the state, claim frequency continues to decline and the combined ratio — 99% in 2014 —– remains favorable, according to NCCI.