Employers with poor loss histories will pay even more for their workers' comp coverage starting next year as most states change the way premiums are calculated.
But policyholders with proven risk management practices and safety programs that reduce workplace injuries will benefit from NCCI Holdings Inc.'s change in the methodology determining an individual employer's experience modification factor, experts say.
The Boca Raton, Fla.-based National Council on Compensation Insurance (NCCI) helps 38 states set their workers compensation rates. Click here for a map. Although Indiana is listed as an "independent bureau" state, they do utilize NCCI for data collection services and therefore fall into the methodology calculation changes.
NCCI manages the nation's largest database of workers compensation insurance information. NCCI analyzes industry trends, prepares workers compensation insurance rate recommendations, determines the cost of proposed legislation, and provides a variety of services and tools to maintain a healthy workers compensation system.
The experience mod changes begin with Jan. 1, 2013 policy purchases or renewals.
This marks the first time in two decades that the rating organization has updated the "split point" used in its experience rating plan to more accurately reflect individual employer loss frequency and severity. An employer's experience mod factor has a significant affect on employer expenses because underwriters rely on them to adjust premiums with credits or debits.
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