Kentucky approves average 6.8% reduction in comp loss costs

The Kentucky Department of Insurance approved a recommendation from the National Council on Compensation Insurance to reduce loss costs by an average of 6.8% across all class codes, representing the 17th consecutive loss cost decrease for the state.

“The overall decrease shows the continuing decline in claim severity and frequency,” the department said in a statement. “Wage and medical inflation have the potential to affect historical patterns and were considered, but it is not anticipated to create increased premiums due to the declining claim trend.”

Loss costs are an average compensation for lost wages based on the level of disability and medical benefits and are a direct component of an employer’s work comp rate.

While the department approved an average reduction of 6.8%, not all employers will see a decrease. For example, while the new loss cost for surface coal mining is down 2.2%, the new rate for underground coal mining is up 3.5%.

The new loss costs apply for policies incepting on or after Jan. 1. 2023.

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