One of West Virginia's primary factors in establishing workers' compensation insurance premiums is expected to decrease 8.1 percent in November, saving the state's 36,000 employers more than $25 million.
Since West Virginia privatized workers' comp insurance on Jan. 1 2006, the rates have decreased a cumulative total average of 43.7 percent, and if Michael Riley, West Virginia's acting insurance commissioner, accepts the newest recommendation, starting Nov. 1, overall rates will be 51.8 percent lower than they were in 2005, when West Virginia was the only workers' comp provider.
The National Council on Compensation Insurance Inc., West Virginia's rating and statistical agent, endorsed the reduction to Riley in a July 15 letter. William Kenny, deputy state insurance commissioner, says the Offices of the Insurance Commission are going over the NCCI filing, and he anticipates Riley will issue a ruling by mid-August.
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"Obviously we are very pleased as it is a decrease – especially since nationally, workers' comp rates are starting to go up," Kenny says. "This is a real plus for West Virginia; that's for sure."
The reduction would come in a loss of cost rates, which is the premium portion that reveals actual loss costs. Provisions for a company's expenses or profit are not included.
However, not all employers would experience an 8.1 percent decline. West Virginia has more than 550 job classifications; some would fall, others would increase, and some would remain the same.
West Virginia's state law requires employers to carry workers' comp insurance, which they pay, and employers who cannot get workers' comp insurance from carriers can purchase it through the Assigned Risk Pool, though rates are typically much higher.
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