NU Online News Service, MAY 8, 1:38 p.m. EDT

ORLANDO, FLA–The National Council on Compensation Insurance (NCCI) management said yesterday it expects to start using its new methodology for occupational risk classification on Oct. 1.

Steve Klingel, NCCI president and chief executive officer, told attendees at the NCCI Annual Issues Symposium here that it would be the first change to the organization's system of ratemaking in 40 years.

Mr. Klingel later said in an interview that the changes are expected to add "more stability and get rid of some inequities."

Jeff Eddinger, NCCI practice leader and senior actuary for ratemaking, said feedback from regulators who must approve the change has been positive in the 37 states where his organization acts as a statistical agent and rate making group.

According to figures released by the NCCI, the impact on premiums for 62.3 percent of the rate classes by using the new methodology would swing from minus 5 percent to plus 5 percent.

Twenty-one percent would see premiums increase from 5 percent to 15 percent and 13.7 percent would see rates decrease from 5 percent to 15 percent. The impact, plus or minus up to 25 percent or more, would affect less than 3 percent of classes.

Mr. Eddinger said the change in methodology involved a revised way of viewing losses. In the current system, injuries are classified as serious or not serious, and the new method "looks at more than injury type."

Instead, he said, the data examined includes the part of the body involved in the injury. It also looks at whether a claim is opened or closed on first report and if the injury is classified as likely to develop or not likely to develop.

He said the NCCI has held a series of webinars for insurance regulators as the system was developed. Now that it is ready to be deployed, he said NCCI has met with individual insurance commissioners wanting more information.

Mr. Eddinger said NCCI is optimistic that its new system will be approved by all of its client states, but for those who don't accept it, "we're still able to do it [class rating] the old way."

Special Reports /

NCCI Ready To Roll Out New Rating Methodology

Related Stories

Recommended For You