FRANKFORT, Ky. — The Kentucky Department of Insurance (DOI) announces the approval of the 2018 rate filing used to develop rates for workers’ compensation coverage.
For the 13th consecutive year, the filing shows an overall decrease in Kentucky’s loss costs. A loss cost is an average compensation for lost wages based on the level of disability, plus medical benefit payments. The loss cost is a direct component in the computation of an individual employer’s workers’ compensation insurance rate.
According to the loss costs figures submitted in the 2018 annual rate filing, there is an average reduction of 10.8 percent across the class codes used in Kentucky. The class codes include manufacturing, office and clerical, contracting, and goods and services.
Not all classes experienced a reduction. Coal classes increased 11.7 percent for surface mining and 16.7 percent for underground mining.
DOI Commissioner Nancy Atkins attributes the decrease to necessary legislative reforms and the commitment to safety by Kentucky employers. “We are very pleased to see our workers’ compensation market remaining strong in the Commonwealth,” said Atkins. “The reforms included within House Bill 2 passed by the General Assembly in 2018, along with our employer’s safety commitment are leading factors to this year’s decrease and our long performing workers’ compensation market.”
“HB 2 gave important reforms that encompass several common sense changes and even increase some benefits,” said bill sponsor Rep. Adam Koenig, of Erlanger. “This bill brought the first reforms to workers’ compensation since 1996. I appreciate everyone involved in helping to bring down these costs.”
The National Council on Compensation Insurance Inc. (NCCI) develops and submits the filings each year and is the oldest provider of workers’ compensation and employee injury data and statistics in the nation. NCCI works with insurance carriers to collect data and develop loss costs each year. Use of the information is voluntary, but most workers’ compensation 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 approved rate filing was effective Oct. 1.