Tennessee Approves 19% Decrease in Workers’ Comp Rates
Workers’ compensation rates in Tennessee will decrease by nearly 20 percent next year, marking the sixth consecutive year of decreases, according to a statement from the Tennessee Department of Commerce and Insurance.
TDCI Commissioner Julie Mix McPeak approved a 19 percent reduction filing by the National Council on Compensation Insurance (NCCI) for 2019 on Oct. 31, 2018. The rate decrease was first proposed by NCCI in a filing back in August.
Reforms enacted by Tennessee Governor Bill Haslam to the state’s workers’ compensation system in 2013 are credited with improving the state’s compensation system, TDCI said.
Since then, loss cost reductions of over 48 percent have been approved, representing substantial savings for Tennessee employers. The reduced rates are also impacted by Tennessee employers seeing fewer significant workplace injuries. NCCI said the proposed decrease is attributed in part to a continued decrease in Tennessee’s lost-time claim frequency.
NCCI also noted that both indemnity average cost per case and medical average cost per case have remained “relatively stable” in recent years after adjusting to a common wage level.
“I am pleased to see these continued decreases in workers’ compensation premiums,” Haslam said. “Our workers’ compensation reform has been a significant step toward improving the business climate in Tennessee and growing jobs. Our reforms brought clarity and fairness to the system and continue to benefit our state.”
This latest reduction will become effective March 1, 2019. Previous reductions of 12.6 percent and 12.8 percent were approved with March 1, 2018, and March 1, 2017, effective dates, respectively.
Insurance carriers combine NCCI’s loss cost filings with company experience and expenses to develop full insurance rates.
“This is more positive economic news for Tennessee and our workforce,” said McPeak. “These reductions mean Tennessee employers will have more money to invest into their businesses and employees, which will in turn benefit our local communities. Tennessee’s workforce will also benefit from these loss cost reductions because they are the result of decreases in lost-time claim frequency and more stable claims costs.”