Mo. Urges Cuts To Workers' Comp Rates

NU Online News Service, Dec. 30, 10:56 a.m. EST

The Missouri Department of Insurance is recommending workers' compensation loss cost rates be cut by 8.1 percent, significantly below the 1.9 percent recommendation from the National Council of Compensation Insurance.

The department said today that it made the recommendation after a review of statewide data for insurance claims by employers for injured workers in 2009.

The department said that the loss costs are "used by insurance companies in setting their rates in the coming year and generally reflect the average costs of lost wages and medical payments of workers injured on the job."

While the NCCI files loss costs for review with the department, the insurance department makes its own recommendations after reviewing NCCI's filing.

The department said that under the state's law, insurers and self-insures are allowed to set their rates based either on the recommendations of the NCCI or the department. Both the NCCI and the department make recommendations for general loss, as well as specific industry groups.

The NCCI's 1.9 percent decrease and the department's 8.1 percent decrease recommendations go into effect Jan. 1.

This is the fourth year both the NCCI and the department have recommended loss cost decreases, the department said.

"If insurers implement our recommended decrease, Missouri employers could see as much as $80 million in reduced premiums in the coming year," said John M. Huff, director of the Missouri Department of Insurance, Financial Institutions and Professional Registration in a statement. "In today's challenging economy, it's important that state government be a strong and effective partner with Missouri businesses to keep costs down."

He added that the workers' comp insurance market is increasingly competitive with 25 new companies in 2008 for a total of 256 companies actively writing workers' comp policies.

He went on to say that competitive prices in the state are largely due to continued improvements in workplace safety, resulting in fewer workers' comp claims. The frequency of on-the-job injuries is down 60 percent over the past 15 years, he noted.