North Carolina High Claims Cost Shocker
Many of you responded to last week’s note on the North Carolina High Claims Cost from the 16 states surveyed by the WCRI – Workers Compensation Research Institute. I was unable to let quite a few of the comments go through, as specific insurance companies were named in the posts by our readers. Thanks for the posts.

We have already been threatened with lawsuits by some of the insurance companies over the last few years. I could not allow the responding posts to go through to the blog and end up in trouble.
I have looked over the study by the WCRI and it is legitimate. They are one of the bellwethers for Workers Compensation statistical analysis. The WCRI allows no political influence. The numbers are the numbers. I have bought a few of their studies over time.
The bottom line is that if the WCRI says it is true, the accurateness of the statement is without question. I have not had a chance to review the full study. You have to devote a weekend to reading the studies as they are not short.

The one thing that differentiates North Carolina is that the state uses the NCRB – North Carolina Rate Bureau instead of the NCCI based in Boca Raton FL. NCCI makes rate recommendations for approximately 50% of the states. That fact probably has no bearing on the WCRI study.
A follow up article was published which indicated medical costs were the reason for the rise in costs. As I said earlier, I will need to research the topic in depth over the next few weeks. I will report back after I have drawn my own conclusions.
Is reform needed in NC? Medical costs are the most difficult to rein in by a state government unless the fee schedule is artificially lowered. Access to medical care may become a problem if the medical rates are too low.
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One Response
James – Interesting post. I have been hearing rumors that the legislature is looking long and hard at doing away with the Rate Bureau, an entity that I understand is more or less unique in the country. I believe the impetus for such a move is largely due to the big ruckus last year about the substantial increase in homeowners rates for coastal residents, but obviously abolishing the Rate Bureau would impact other rates as well, and I wonder what effect that would have on workers compensation costs. Perhaps allowing the free market to set rates would result in more competition and lower rates, but I really don’t know. I’d be interested in your thoughts on that.
Regards,
George Simpson