Texas Extends Use of Negotiated Experience Modifiers in Workers’ Comp

July 11, 2018

The Texas Department of Insurance has approved a request to extend the use of negotiated experience modifiers in the state’s workers’ compen­sation system for another year.

Without the change, under the NCCI Experience Rating Plan Manual, which Texas adopted in 2015, the use of negotiat­ed experience modifiers was set to expire on July 1, 2018.

TDI’s action was in response to a petition filed by the Independent Insurance Agents of Texas (IIAT) requesting the extension.

Regarding IIAT’s request, the insur­ance department’s order stated: “The petition asks TDI to amend Rule 4-C-4 of the National Council on Compensation Insurance (NCCI) Experience Rating Plan Manual for Workers Compensation and Employers Liability Insurance (NCCI Experience Rating Plan Manual). Without the amendment, the use of negotiated experience modifiers in Rule 4-C-4 would expire on July 1, 2018.”

IIAT said in its petition that another year is needed to educate Texas businesses, insurers and agents that the use of negotiated experience modifiers would no longer be allowed in Texas as a result of the adoption of the NCCI Experience Rating Plan Manual.

IIAT cited several reasons for extending the date. The association said in its petition that it has found that employers in some industries, particularly the “petrochemi­cal, oil and gas, heavy construction, road construction and some contractors for gov­ernmental projects continue to require an experience modifier of 1.00 or less in order to perform work.”

The use of the “experience modifier as a disqualifier to work” could apply to certain contractors and subcontractors, the agents’ association said. IIAT added that it found that few of the above-listed “industries had seen [the July 1, 2018] deadline as a possible disruptor of current and future projects.”

According to commissioner’s order num­ber 2018-5555, Rule 4-C-4 – Negotiated Modifications will no longer apply for workers’ compensation policies effective on and after July 1, 2019.