Rhode Island AG Opposes NCCI Proposal Advisory Loss Coss Increases For Workers' Comp Insurance

                               Providence, RI (CompNewsNetwork) - Rhode Island Attorney General Peter F. Kilmartin formally opposed National Council on Compensation Insurance's (NCCI's) request for an overall 3.9 percent increase for advisory loss costs for workers' compensation insurance line of business. After thorough analysis and an independent actuarial study, the Attorney General determined that the request by NCCI is too high and should be rejected. Attorney General Kilmartin submitted an alternative calculation that said instead of an increase, an overall decrease of 0.6% should be approved. The opposition was filed with the Department of Business Regulation.

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. NCCI recommendations may then used by insurance companies to calculate their worker's compensation rates.

“Unsubstantiated increases in workers' compensation insurance jeopardize the ability of business owners to keep their doors open and unfairly increase the cost of goods and services for all Rhode Island citizens. At a time such as this, when businesses are struggling to stay open, special attention must be paid to any additional costs they are asked to pay, all of which end up being passed on to consumers in the form of higher costs for all goods and services,” said Attorney General Peter Kilmartin.

Based on a thorough review of NCCI's filing and analysis provided by the independent actuary, the Office of Attorney General has found:

NCCI's selected medical trend factor is excessive. NCCI has simply selected a trend factor to use in its calculations, as opposed to the analytically determined factor recommended by the Attorney General.

NCCI has selected an allowance for loss adjustment expense that is excessive and has not taken into account historical results for this component that have shown decreases between what has been filed and actual development over the past several years.

NCCI's proposed increases also include an inappropriate factor to adjust limited losses to an unlimited basis which is wholly unsupported by historical data. NCCI seeks a rate that will cost Rhode Island business owners approximately $4 million per year for which no benefit to Rhode Island business is received in return.

“As Rhode Island works to improve its economic health, everything that can be done must be done to ensure that Rhode Island citizens and businesses are treated fairly,” continued the Attorney General. The Attorney General's filing before the Department of Business Regulation was given by Assistant Attorney General Genevieve Martin, Unit Chief for the Insurance Advocacy Division.

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