New Jersey Ins. Commissioner Approves 5.1% Rate Decrease and more

The New Jersey insurance commissioner has approved a 5.1% rate decrease for workers compensation premiums on a new and renewal basis, the Compensation Rating and Inspection Bureau said Wednesday in a letter to bureau members.

This decrease is effective Jan. 1, 2018.

New Jersey’s system works with statutory rates so all carriers will move to these new decreased rate sets.

Additionally, the maximum weekly benefit with respect to all types of injuries, except permanent partial disabilities, will be changed to $903 from $896. The minimum weekly benefit will be changed to $241 from $239.

In cases involving permanent partial disabilities, the present maximum weekly benefits ranging from $239 to $896 will increase to $241 and $903, respectively. The minimum weekly benefit for permanent partial injuries will remain at $35, the comp bureau said. 

 

Source: http://www.businessinsurance.com/article/20171128/NEWS08/912317503/New-Jersey-approves-workers-comp-rate-decrease-ups-benefits

Florida’s Workers’ Comp Rate Decrease By Industry

FORT MYERS, Fla., Nov. 27, 2017 /PRNewswire/ — What goes up must come down is a fundamental law of gravity and roller coasters.  But it is also starting to become an appropriate depiction for Florida workers’ compensation rates, according to Mark Webb, senior vice president of Lykes Insurance.

“In what is heralded as good news for employers, the Florida Insurance Commissioner approved an amended filing on Nov. 9, 2017 ordering an average decrease of 9.5 percent in workers’ compensation rates effective Jan.1, 2018,” says Webb. “This decrease was slightly more than the 9.3 percent decrease proposed by the NCCI in August.”

Webb notes that this is an average decrease. The actual decrease is allocated among classifications by industry as follows:

Office and Clerical -11.5 percent
Goods and Services -10.6 percent
Manufacturing -10.3 percent
Contracting -7.19 percent
Miscellaneous -8.3 percent

This decrease was filed based on a reduction in claim frequency over the two years prior to 2016.  However, it does not take into consideration the two Supreme Court decisions in 2016 that brought the 14.5 percent increase last December: the Castellanos and Westphal decisions.

These two cases resulted in retroactive changes to claimant attorney compensation and impairment benefits.  Few deny that these court decisions are and will continue bringing upward pressure on the cost of claims, and it seems unlikely that the Florida legislature will take any action on reforms to address this issue, especially in the wake of a rate decrease.  According to Logan McFaddin, Southeast Director for the Property Casualty Insurers Association of America, “Experience data relating to the impact of Castellanos and Westphal continues to mature and will likely be reflected in future rate filings.”

This sentiment was reflected in the order from the Insurance Commissioner that directed the NCCI in future recommended rate filings to provide a detailed analysis of the impact of Castellanos, including reopening of older claims, changes in reserves and settlement rates, changes in claim frequency and severity, increasing attorney involvement, and fees paid to attorneys.

One issue that needs to be acknowledged is the possibility of a mid-term cancellation and re-write of a workers’ compensation policy to take advantage of the new rates. While it is uncertain how willing insurance carriers will be to embrace this action, this should be evaluated on a case by case basis, because there are some reasons for concern over this strategy.

First, a mid-term change will eliminate any potential dividends that may be earned on a policy. Also, carriers may choose to apply a short rate cancellation penalty if a policy is cancelled and moved to another carrier. The short rate penalty is approximately 10 percent of the unearned premium, which, if applied, would completely negate any advantage of the 9.5 percent rate decrease. Finally, if rates do go back up next year, the policyholder would be moving up the date that the policy would be impacted by the higher rates.

“The bottom line is, as usual, uncertainty prevails,” Webb concludes. “With the uncertainty surrounding the market impact and future rates, it is important to not allow a rate decrease to bring complacency to the significance of safety and claims management in your workers’ compensation program.  We strongly suggest working with your advisors and advocates to help you prepare for whatever the future may hold for workers’ compensation.”

Source: http://markets.businessinsider.com/news/stocks/Dealing-with-the-Workers-Compensation-Roller-Coaster-1009678544

Workers’ Comp Drug Spend Continues to Drop, According to CompPharma’s 14th Annual Survey of Prescription Drug Management

MAGGIE VALLEY, N.C.–(BUSINESS WIRE)–CompPharma’s 14th Annual Survey of Prescription Drug Management in Workers’ Compensation showed an average 11 percent reduction in payers’ pharmacy spend, driven by a 13.3 percent reduction in opioid cost. The survey analyzed the 2016 pharmacy cost data of 23 workers’ compensation insurance carriers, third-party administrators, self-insured employers, and state funds.

Working with their pharmacy benefit managers, payers cut one of every six dollars in opioid spend, which the report called a “truly remarkable result.” In contrast, across all payer types, pain medication use declined by a scant 1 percent (Quintiles IMS).

“Clearly the efforts of workers’ comp regulators, payers, desk-level staff, PBMs and prescribers have paid off,” said Joseph Paduda, president of CompPharma, LLC. “While we have much left to do, this represents a dramatic improvement in the lives of thousands of patients.”

Payers are far from complacent, with all respondents expressing grave concerns about the risk of opioid addiction or dependency. Most are continuing to refine and improve programs to help patients address pain while minimizing use of opioids, relying on physician and/or pharmacist review of claims, early identification of potentially risky prescribing, and increased use of drug testing.

In contrast, compound drug utilization and spend has dropped dramatically and is no longer of great concern to payers.

A complimentary copy of the 2016 survey can be downloaded from https://tinyurl.com/CP2017RxSurvey.

Florida Orders Workers’ Comp Rate Decrease of 9.8%

Florida Insurance Commissioner David Altmaier has ordered a statewide overall workers’ compensation rate decrease of 9.8 percent, a slightly higher decrease than the 9.6 percent decrease filed by the National Council on Compensation Insurance (NCCI) back in August.

Altmaier’s order disapproving NCCI’s 2018 rate filing was issued by the Florida Office of Insurance Regulation on Tuesday, and stated NCCI’s rate request be amended and refiled by Nov. 7, 2017.

Altmaier’s order cited NCCI’s 2 percent allowance for profit and contingencies in its rate filing as the reason for rates being disapproved. The order states that the refiling should contain a profit and contingencies provision no greater than 1.85 percent.

The rate decrease will come as a welcome surprise for many Florida businesses that were expecting additional rate increases after the Florida Supreme Court issued two decisions – Castellanos v. Next Door Company and Westphal v. City of St. Petersburg, – in 2016 that sent rates up by double digits this year.

“Using new data, this experience based filing proposes a decrease in rate level based on data from policy years 2014 and 2015 valued as of year-end 2016,” the order states. “While some of the experience used as the basis for this filing occurred before the recent Florida Supreme Court decisions, a portion of the experience period includes claims that occurred after the decisions.”

At a rate hearing in mid-October, NCCI said a decline in claims frequency due, in part, to safer workplaces, enhanced efficiencies in the workplace, increased use of automation, and innovative technologies were partly behind the recommended decrease. NCCI said this trend is not unique to Florida but countrywide, and is expected to continue in the future.

According to OIR’s order, from 2011 to 2015, the cumulative decreases in the indemnity and medical loss ratios were 19.9 percent and 12.3 percent, respectively. The primary reason for the declining loss ratios is a significant reduction in the lost-time claim frequency which declined by 45 percent from 2001 to 2015 with over 8 percent of the decline occurring in 2014 and 2015.

“Even after considering the impact of the Castellanos and Westphal decisions, other factors at work in the marketplace combined to contribute to the indicated decrease, which included reduced assessments, increases in investment income, decline in claim frequency, and lower loss adjustment expenses,” the order states.

However, the order also mandates that NCCI provide detailed analysis of the effects of the Castellanos decision by the Florida Supreme Court in future filings, which accounted for 10.1 percent of the 14.5 percent increase in Florida workers’ compensation rates this year.

“To ensure workers’ compensation rates are not excessive, inadequate or unfairly discriminatory … it is imperative that additional quantitative analysis be conducted to determine the effect the Castellanos decision is having on the Florida workers’ compensation market and the data used to support future rate filings,” the order states. “The analysis may include alternative data sources and should examine changes to the Florida workers’ compensation market that are attributed to or observed as a result of the recent court decision.”

Approval of a revised rate decrease is contingent on the amended filing being submitted with changes as stipulated within the order. If approved by OIR, the revised rate decrease would become effective on Jan. 1, 2018 for new and renewal business.

Read Order: Florida OIR Workers’ Compensation Insurance Rate Decrease

By  of InsuranceJournal.com | November 2, 2017

Florida WC Rate Decrease Hearing Set for Tomorrow

The Florida Office of Insurance Regulation will be discussing on the 18th of October NCCI’s proposed rate decrease of 9.6%.  Agenda shown below.  If you have any comments that you would like the state to hear, you can email ratehearings@floir.com with the subject line of your e-mail should read “NCCI” up until the 25th of October.

PUBLIC HEARING AGENDA
NATIONAL COUNCIL ON COMPENSATION INSURANCE
WHEN: October 18, 2017, 1:00 p.m.
WHERE: 412 Knott Building
404 South Monroe Street
Florida Capitol Complex
Tallahassee, FL 32399
GENERAL SUBJECT MATTER TO BE CONSIDERED: National Council on Compensation Insurance (NCCI) has
proposed an overall average decrease in rate levels of 9.3% for the voluntary market for all new and renewal workers’
compensation insurance policies written in the State of Florida, effective January 1, 2018. The filing also requests a
decrease to the fixed expense cost applicable to every workers’ compensation policy in Florida from $200 to $160 which
when combined with the rate level decrease results in an overall average workers’ compensation premium decrease of
9.6%.
1. Opening Remarks Office of Insurance Regulation (Office)
a) Introduction of Office personnel
b) Introduction of participating parties
2. Presentation National Council on Compensation Insurance
3. Public Comment Open to the Public
4. Closing Remarks
5. Adjourn
Any comments or concerns not addressed at the public hearing may be forwarded to ratehearings@floir.com; the subject
line of your e-mail should read “NCCI”. The record will be open for public comment until October 25, 2017.

New Hampshire Workers’ Comp Rates May Decrease for Sixth Year in a Row

From InsuranceJournal: New Hampshire employers could pay less for their workers’ compensation insurance next year because of a filing that lowers the rates and loss cost factors insurers use to develop prices. This move would mark the sixth year in a row that New Hampshire workers’ compensation rates have decreased, according to a press release issued by the New Hampshire Insurance Department.

“A decrease in workers’ compensation rates means a decrease in costs to New Hampshire businesses.” said Insurance Department Commissioner Roger Sevigny in the release. “These considerable savings could be used to bring more workers, higher salaries and expanded operations to New Hampshire.”

The National Council on Compensation Insurance (NCCI) filed a rate proposal in August with the New Hampshire Insurance Department to reduce voluntary loss costs by 13.3%. The NCCI is a licensed rating and statistical organization that gathers data, analyzes industry trends, and prepares workers’ compensation rate filings for New Hampshire and many other states.

The loss cost is the portion of an employer’s insurance premium that pays claims costs for work-related injuries. It is ultimately used by insurers to set rates and premiums in the voluntary market. All insurers writing voluntary workers’ compensation in New Hampshire are required to use the new loss costs, along with a loading to cover company expenses.

The NCCI has filed a decrease of 10.3% for the assigned risk, or “residual,” market. The residual market ensures access to workers’ compensation for companies that are not able to buy coverage on the open market. About 9% of workers’ compensation insurance is obtained this way, according to the press release.

The New Hampshire Insurance Department has scheduled a public rate hearing for 10 a.m. September 21 to give NCCI an opportunity to discuss the filing and interested parties and other stakeholders the ability to provide testimony or comments. The hearing will be held in the Insurance Department’s Conference Room 274.

After the hearing and a short public comment period, Commissioner Sevigny will issue a decision on the filing, and the new rates will apply to policies effective January 1, 2018.

“The decrease in workers’ compensation rates is great news for job creators and seekers all across the Granite State,” said Governor Chris Sununu in the release. “This will increase New Hampshire’s advantage with regards to attracting, retaining and growing jobs.”

The New Hampshire Insurance Department’s mission is to promote and protect the public good by ensuring the existence of a safe and competitive insurance marketplace through the development and enforcement of the insurance laws of the State of New Hampshire.

Source: Insurance Journal East

http://www.insurancejournal.com/news/east/2017/09/12/463973.htm

FAPEO Sends Out NCCI’s FL Workers’ Compensation Rate filing for 2018

The following is an excerpt from the email sent to FAPEO members:

 

Government Affairs Update

By David Daniel

Florida PEO Lobbyist

 

Yesterday NCCI released their proposed rate filing for workers compensation rates for 2018.   This filing was for a rate DECREASE of 9.6 % effective January 1, 2018.  They expect OIR to hold a public hearing on this proposed increase sometime in October.  

 

The expectation was for an additional significant rate increase based on the recent Florida Supreme Court actions and how the change impacted behavior.  Apparently NCCI has based this recommendation on a downward trend in experience and from data from 2014-15.  They indicate this recommendation is not a law filing like last year but rather an experience filing.  They believe the impacts of the Castellanos case were addressed in their last recommendation.

 

This caught the business community off guard and it takes the political wind out of the sails for real workers compensation reform in the 2018 Legislative Session.  While I can make the case that this is good new for the business community it could put a squeeze on workers compensation carriers in the marketplace. 

 

Robert Skrob, CPA, CAE

Executive Director

Florida Association of Professional Employer Organizations

 

Comment below what you think of this recommendation from NCCI.

 

-David Campbell

Risk Consultant at Libertate Insurance

 

 

 

Will master Cyber policies be the next EPLI product for PEOs?

With two carriers now offering master PEO cyber programs, the question here is PEO’s be able to sell these as part of their overall package?

A recent 2017 RIMS survey has shown that 83 percent of organizations have a standalone cyber insurance policy (up 3 percent from 2016) and only 14 percent are utilizing the cyber coverage offered in their other insurance policies.

One reason for this statistic could be that Risk Managers want specific endorsements and add-on coverages that apply directly to their industry or are a result of a problem they’ve faced in the past.  This has been a crucial part of individual cyber policies over the past few years as the carriers try to keep up with the quickly evolving cyber space.

With the above in mind, it may be difficult for PEO’s to make this as part of their basic package as EPLI has become over the past decade.

I would like to note the PEO cyber program has one crucial endorsement, Social Engineering, that can be added on for an individual client company.  This has to be individually underwritten for each client company adding another layer for the PEO sales rep to cross-sell.

If you work in the PEO industry, please comment below with your thoughts of PEO’s offering cyber coverage to client companies. For more statistics from the RIMS survey please visit: http://www.insurancejournal.com/news/national/2017/08/25/462357.htm

 

-David Campbell

Risk Consultant at Libertate Insurance