On Feb. 20, Maine Insurance Superintendent Eric Cioppa announced approval of the National Council on Compensation Insurance, Inc.'s (NCCI) 2018 loss costs for Maine, filed earlier this year. The rate request proposed an average loss cost decrease of 12%. Thanks to Cioppa's approval, the new NCCI loss costs are effective April 1, 2018, for new and renewing policies.

“Maine employers' efforts to improve workplace safety, return injured workers to their jobs in a timely manner, and control medical costs continue to pay off,” Cioppa said in a statement. “This most recent decrease should result in lower workers' compensation premiums on average across all industry groups.”

According to Cioppa, the recently filed NCCI loss costs represent a cumulative decrease of 59.5% since the 1992 workers' compensation reform. He estimates that if all insurers fully adopt the decrease, Maine businesses could save about $27 million following implementation.

Michael P. Bourque, president and CEO of The MEMIC Group, Maine's largest and leading workers' compensation insurance company, hailed the announcement, noting that this is the largest rate reduction in more than 20 years.

MEMIC also said that it will adopt the rate recommendation approved by the Maine Bureau of Insurance and submitted by NCCI.

“As we celebrate our 25th year serving Maine, this dramatic decrease in workers' compensation insurance rates is great news for employers and the Maine economy,” said Bourque in a statement. “The decrease is testament to the hard and persistent work of policyholders and their employees who have reduced the frequency and severity of work-related injuries here in Maine. I think the hard-won compromises to fix the system 25 years ago have proven their value to all concerned, and we look forward to continuing our mission to provide workplace safety service, fair treatment of all workers and support a strong economy.”

What are 'loss costs'?

Loss costs are based on previous and projected losses and benefit payments that employers are likely to incur. NCCI provides advisory rates for insurance carriers that offer workers' compensation coverage in Maine. When such insurers file their rate requests with the Bureau of Insurance, NCCI-approved loss costs are available as a reference.

The loss costs change currently ranges from -10.4% to -15.1% depending on the industry group, and the 12% decrease represents an average. According to the Bureau of Insurance, because this is an average decrease, rates for some individual businesses will go up while the majority will go down. Employers should also keep in mind that the loss cost decrease is only a recommendation, and individual insurers may or may not accept the proposed change in loss costs.

The workers' comp insurance market in Maine is considered competitive, and insurers each determine their own rate level. Insurers may modify the NCCI loss costs and must select their own expense and profit factor in setting rates.

Workplace safety pays off

Both Cioppa and Bourque said that the coming reduction of rates is another example of the benefits of safer workplaces and the prompt-return-to-work for those who have recovered from an injury.

“The efforts made by Maine employers and their employees to work safely continues to pay dividends figuratively and literally. This past fall MEMIC distributed $21 million in dividends to Maine policyholders in recognition of superior results and we now have returned more than $240 million back into the Maine economy right where it belongs. This rate reduction is further icing on the cake. In addition to workplace safety, the other essential factors that drove these results are effective management of injuries and a focus on return-to-work strategies,” said Bourque.

Anyone with questions about workers' compensation insurance can obtain information and assistance from the Bureau by visiting the agency's website, calling toll-free (in Maine) 1-800-300-5000 or TTY Maine Relay 711, or e-mailing Insurance.PFR@maine.gov.

Special Reports /

Maine employers to see lower workers' comp rates

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