Maine Government News
Maine’s Bureau of Insurance Announces Approval of Decrease in Workers’ Compensation Loss Costs, with $3.5 Million in Expected Savings to Help Businesses and Consumers
November 13, 2012
Professional & Financial Regulation - Insurance
Insurance Superintendent Eric Cioppa announced today that the Bureau of Insurance has received, reviewed and approved the National Council on Compensation Insurance, Inc.’s (NCCI) 2013 loss cost filing proposing a premium decrease of 1.8%; resulting in a cumulative decrease of 51% since the 1992 workers’ compensation reform.
“Loss costs are the portion of premium that covers benefit payments,” explained Superintendent Cioppa. “A decrease in rates is an indication that the efforts of Maine employers to improve workplace safety are continuing to reduce claims.”
NCCI is the advisory rating organization for insurance companies that offer workers’ compensation coverage in Maine. NCCI-approved loss costs are available to insurers to reference when filing their workers’ compensation rates with the Bureau of Insurance.
Maine currently has a competitive market for workers’ compensation insurance and each insurer sets its own rate level. Insurers may modify the NCCI loss costs and must select their own expense and profit factor in setting rates.
“This NCCI filing for 2013 is expected to result in approximately $3.5 million in savings, benefiting both Maine businesses and consumers,” Cioppa added. “When combined with the 2012 loss cost filing, premiums in the insured market will have been reduced by nearly $10 million during this two year period.”
The 2012 reduction was more than $6.5 million. It was a larger loss costs decrease than the current filing, in part, because of a Medical Fee Schedule change leading to a onetime change by the Workers’ Comp Board and a onetime reduction in medical expenses. The Medical Fee Schedule outlines billing procedures and reimbursement levels for health care providers who treat injured employees.
The new NCCI rates go into effect for new and renewing policies as of January 1, 2013. The 1.8% reduction is an average. Most employers will realize a decrease, although some will experience an increase.