Workers' comp rate decrease scaled back

Workers' compensation rates still are expected to head down in Nevada next year, but the decline may not be quite as large as officials expected a few weeks ago.

Insurance Commissioner Alice A.

Molasky-Arman said her staff recommended that the decreases be scaled back.

The National Council on Compensation Insurance Inc.

in September proposed a 16.4 percent decrease in the loss portion of workers' comp rates in Nevada.

The organization tracks workers' comp losses in the state, and insurance carriers are required to use its figures in their rate filings.

Each insurance company then adds a figure to the loss figure to cover its administrative expenses and profit.

The insurance commission staff, however, recommended an average 12.3 percent decrease in the loss category for the workers' compensation coverage purchased by most companies and average decrease of 9.1 percent for companies whose loss history means they are included in the assigned-risk pool.

Molasky-Arman was quick to note, that those figures are only averages.

Some employers may face increases up to 12 percent in the voluntary market and 15 percent in the assigned risk program.

The rate changes will apply to each employer on the anniversary date of its workers' comp policy.

The state's staff recommended trimming next year's reduction because it's concerned that higher medical fees could push up the costs of treating workers.

In addition, staff members said they're concerned about changes in the way that permanent disabilities are rated and also want to keep a close eye on the pattern of losses in the next year.

Even though the decline in workers' comp rates will be somewhat smaller than initially projected, Molasky-Arman noted that neighboring states California, in particular are raising workers comp rates sharply.

"I am happy that is not the case in Nevada, where we are now seeing the wisdom of the methodologies established here," the insurance commissioner said.

As part of the rate structure for next year, Molasky-Arman also approved a change in a program designed to provide an incentive for companies in the assigned-risk pool.

A program known as a Simplified Assigned Risk Adjustment Program, which carried a potential surcharge of 49 percent for companies with poor histories, has been replaced by a program called Assigned Risk Adjustment Program.

The new program carries a maximum surcharge of 25 percent.