On Feb. 20, Maine Insurance Superintendent Eric Cioppa announcedapproval of the National Council on Compensation Insurance, Inc.'s(NCCI) 2018 loss costs for Maine, filed earlier this year. The raterequest proposed an average loss cost decrease of 12%.Thanks to Cioppa's approval, the new NCCI loss costs areeffective April 1, 2018, for new and renewing policies.

“Maine employers' efforts to improve workplace safety, returninjured workers to their jobs in a timely manner, and controlmedical costs continue to pay off,” Cioppa said in a statement.“This most recent decrease should result in lower workers'compensation premiums on average across all industry groups.”

According to Cioppa, the recently filed NCCI loss costsrepresent a cumulative decrease of 59.5% since the 1992 workers'compensation reform. He estimates that if all insurers fullyadopt the decrease, Maine businesses could save about $27 millionfollowing implementation.

Michael P. Bourque, president and CEO of The MEMIC Group, Maine's largest and leadingworkers' compensation insurance company, hailed the announcement,noting that this is the largest rate reduction in more than 20years.

MEMIC also said that it will adopt the rate recommendationapproved by the Maine Bureau of Insurance and submitted byNCCI.

“As we celebrate our 25th year serving Maine, this dramaticdecrease in workers' compensation insurance rates is great news foremployers and the Maine economy,” said Bourque in a statement. “Thedecrease is testament to the hard and persistent work ofpolicyholders and their employees who have reduced the frequencyand severity of work-related injuries here in Maine. I think thehard-won compromises to fix the system 25 years ago have proventheir value to all concerned, and we look forward to continuing ourmission to provide workplace safety service, fair treatment of allworkers and support a strong economy.”

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What are 'loss costs'?

Loss costs are based on previous and projected losses andbenefit payments that employers are likely to incur.NCCI provides advisory rates for insurance carriers thatoffer workers' compensation coverage in Maine. When suchinsurers file their rate requests with the Bureau ofInsurance, NCCI-approved loss costs are available as areference.

The loss costs change currently ranges from -10.4% to-15.1% depending on the industry group, and the 12% decreaserepresents an average. According to the Bureau of Insurance,because this is an average decrease, rates for some individualbusinesses will go up while the majority will go down.Employers should also keep in mind that the loss cost decrease isonly a recommendation, and individual insurers may or may notaccept the proposed change in loss costs.

The workers' comp insurance market in Maine is consideredcompetitive, and insurers each determine their own rate level.Insurers may modify the NCCI loss costs and must select their ownexpense and profit factor in setting rates.

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Workplace safety pays off

Both Cioppa and Bourque said that the coming reduction of ratesis another example of the benefits of safer workplaces and theprompt-return-to-work for those who have recovered from aninjury.

“The efforts made by Maine employers and their employees to worksafely continues to pay dividends figuratively and literally. Thispast fall MEMIC distributed $21 million in dividends toMaine policyholders in recognition of superior results and we nowhave returned more than $240 million back into the Maine economyright where it belongs. This rate reduction is further icing on thecake. In addition to workplace safety, the other essential factorsthat drove these results are effective management of injuries and afocus on return-to-work strategies,” said Bourque.

Anyone with questions about workers' compensation insurance canobtain information and assistance from the Bureau byvisiting the agency's website, calling toll-free (in Maine)1-800-300-5000 or TTY Maine Relay 711, or [email protected].

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