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Advisory Loss Costs Do Not Appear On Your Workers Comp Policy

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Advisory Loss Costs Are Published By Rating Bureaus

Workers Compensation Advisory Loss Costs (ALC) are published at state-specific times during the year. ALC’s are not to be confused with the insurance companies’ premium rates per classification code.

Graphic Of Tree Dollar Sign Advisory Loss Costs ALC
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Most insureds will never see these rates as the insurance carriers file deviations to the ALC’s.   The deviations are known as Loss Cost Multipliers (LCM’s).   The LCM’s are difficult but not impossible to find.    The state Departments of Insurance or Workers Compensation Boards almost always agree with the LCM’s published by the insurance carriers.

Rarely, the carriers will actually file lower schedules. Usually, the insurance carriers feel they must have sufficient overhead beyond the ALC’s. I have never seen a state insurance department reject a carrier’s insurance filing to increase the ALC.

California’s Rating Bureau WCIRB refers to them as pure premium rates.

During a recent premium audit that we performed for an insured, we found the filed insurance carrier’s rate to be 211% over the ALC. Ask your insurance agent to include what the state’s ALC’s are for each classification code when you are receiving quotes.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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