Loss costs decrease for ninth consecutive year
FRANKFORT, Ky. (Aug. 27, 2014) — An annual filing most insurance carriers will use to develop rates for workers’ compensation coverage was approved today by the state Department of Insurance and will become effective Oct. 1.
The filing shows the ninth consecutive overall decrease in loss costs, Department of Insurance Commissioner Sharon P. Clark said.
Data collected from insurance carriers is used to develop loss costs, which are the average compensation for lost wages, based on the level of disability, plus medical benefit payments. Use of the information is voluntary but most workers’ comp carriers use the NCCI loss cost values as the base to which the insurer’s own loss adjustment and overhead expenses are added to arrive at the rates charged to Kentucky employers.
The loss cost figures show an average reduction of 6.9 percent for the 586 industrial classes used in Kentucky. The industrial classes include manufacturing, office and clerical, contracting, and goods and services. For coal classes, surface mining increased 3.1 percent and underground mining costs decreased 7.7 percent.
“NCCI reports that the industry is becoming more balanced,” Clark said. “This is good news for Kentucky as we have seen a combined reduction of 50.4 percent in the last nine loss cost filings.”
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