Rates for most workers' compensation insurance in Louisiana are expected to decrease by 8.6 percent this year, State Insurance Commissioner Jim Donelon announced today.

Most workers' comp carriers in Louisiana use the National Council on Compensation Insurance (NCCI) annual loss cost filing report to help formulate their insurance rates, and the latest such filing showed Louisiana with an 8.6 percent drop in loss costs, Mr. Donelon said.

The NCCI filing was approved by the Insurance Department this January. Last year NCCI filed for a 13.8 percent rate reduction, and after an actuarial soundness review the department called for a greater cut and NCCI agreed to amend the filing to a 15.8 percent reduction, according to department spokesperson Amy Whittington.

In April and May of 2007, 27 workers' comp companies, making up 22.4 percent of the Louisiana market, filed for rate decreases as a result of the NCCI filing for a total of minus 15.9 percent, Ms. Whittington reported.

Companies will begin adopting the latest NCCI rates by filing for a rate decrease with the Department of Insurance around late March through September and begin using the lower rates within approximately 45 days after approval of the adoption, Mr. Donelon said.

The commissioner noted that the 15.8 percent cut in workers' comp rates last year was the largest decrease of the 36 states that use NCCI.

"This is positive news for our state's business community and will help greatly in our economic development efforts," Mr. Donelon said.

He added that the comp insurance market "continues to show strong signs of improvement, particularly in the area of improved worker safety. Improved worker safety leads to fewer workplace injuries across most employment classes, a trend we have seen over the past few years and the leading cause of these recent rate reductions."

According to the insurance department, the total Louisiana workers' compensation market is estimated at $1.03 billion.

Ms. Whittington said by e-mail that it is a voluntary process to adopt the NCCI loss cost so not all companies adopt it, although most companies do within a few months of the effective date of the approved NCCI loss cost.

Special Reports /

NCCI Calls For 8.6% Rate Cut In Louisiana Comp

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