NCCI sees 7.3% increase
The National Council on Compensation Insurance is seeking a 7.3% loss cost level increase in South Carolina, effective July 1, 2012. The state department of
insurance will have the final say over the filing, and may modify it as it sees fit.
NCCI cites deteriorating claims experience in 2008 and 2009 and an increase in claims frequency as the primary drivers for the loss cost increase. Combined ratios in South Carolina deteriorated from 94% in 2007 to 100% in 2008 and 107% in 2009, and jumped to 124% in 2010.
“This is the first filed increase in South Carolina since the filing effective in July 2008,” NCCI said in an accompanying statement. “Since that time there have been three implemented loss cost level decreases with a cumulative impact of -13%. Assuming this filing is approved as proposed, the cumulative impact of loss cost level changes since 2009 will be -7.1%,” it added.
Observers note that while rates may be firming generally across the country, they are not expected to increase by double digits, which is one definition of a hard market. The current soft market in workers’ compensation is believed to be the longest in recent history.
Even small rate increases are worth cheering, writes respected consultant Joseph Paduda on his blog Managed Care Matters. “For TPAs, many of whom have been hanging on by a thread while waiting for employers to once again look hard at self-insurance, this couldn’t have come any sooner,” he writes.
