NYCIRB Requests 16.9% Loss Cost Increase
New York Compensation Rating Board has filed its annual loss-cost filing with the state Department of Financial Services, requesting a 16.9% increase in workers' compensation loss costs, effective on October 1, 2013.
NYCIRB and DFS are not providing any further details on the filing until they “have a chance to study it and announce the public hearing.”
Previous loss-cost increases were approved by regulators in 2009 (4.5%), 2010 (7.7%), and 2011 (9.1%). The current proposed increase of 16.9% in lost-cost is by far the highest of its kind in recent history.
Major loss-cost increases present an additional challenge to brokers who are already confronted by the split point change which has already been approved to takes effect this October. Employers in blue-collar industries who experience high claim frequency and severity might see tremendous increases in their premiums. Furthermore, insurance companies might be more reluctant to write these high-risk accounts (larger premiums with high frequency of losses) and many brokers may be forced to put their clients in the State Insurance Fund with no other market as an option.
The market is undoubtedly hardening. Data from the Council of Insurance Agents and Brokers shows that in the first quarter of 2013, more than 80% of workers’ comp policies had rate increases. In comparison, during the third quarter of 2010, more than 80% of workers’ comp policies had no change or rate decreases.
The quickest and easiest way to ensure that your clients (especially those renewing after October 1st) have the best underwriting profile to enter this new hardening market is through workers’ compensation premium recovery. This service offers to knock down current and prior years’ experience modifications, obtain cash back returns, and ensure future savings for your clients to keep. Knocking down experience mods will certainly help your clients with the new loss-cost increases and experience rating split point change. There are no out of pocket expenses for you or your clients and we pay first-year and renewal commissions to referring brokers.
