West Virginia Rates Are Falling Again
The West Virginia rates for Workers Compensation have received another reduction recommendation by NCCI. West Virginia is one of states that decided to covert from a State Fund to an open market for Workers Comp insurance.
NCCI has recommended a rate reduction for the ten years since Brickstreet became the proprietary carrier in 2006. The recent rate reduction is 14%. This is a very large reduction considering the state has experienced so many rate reductions over the last ten years.
The West Virginia rates were actually synthesized at the beginning of the privatization in 2006. NCCI used an actuarial extrapolation of rates from the surrounding similar states to procure a rate structure of sorts. Brickstreet was the original monopolistic carrier after conversion of the Old Fund.
The only drawback to many consecutive rate reductions is the pendulum can swing too far to the reduction side and possibly incur a sharp offsetting rate increase.
The reduction was the 12th year in a row. That is an amazing feat.
One has to think the rates must have been very high in West Virgnia’s Old Fund. However, that is an “apples to oranges” comparison as the Fund had a very different Class Code scheme than the applicable NCCI Class Codes.
The total saved by West Virginia employers is over $352 million according to the state’s Governor.
West Virginia can be used as a model for success if any of the remaining monopolistic states try to convert to a private system. I had thought neighboring Ohio would have converted from the BWC by now.
The remaining monopolistic states are Ohio, North Dakota, Washington, and Wyoming. One has to wonder which will be the next to privatize and save their employer premiums as with the West Virginia rates.
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