1 / 9

Workers Compensation Reserve Issues in Selected States

Workers Compensation Reserve Issues in Selected States. Nevada. Prior to July 1, 1999. Employers had two choices for workers compensation Monopolistic state fund (Employers Insurance Company of Nevada, formerly known as State Industrial Insurance System) Self-insurance Nevada-specific

briangwilson
Download Presentation

Workers Compensation Reserve Issues in Selected States

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Workers Compensation Reserve Issues in Selected States Nevada Joanne M. Ottone, FCAS, MAAA

  2. Prior to July 1, 1999 • Employers had two choices for workers compensation • Monopolistic state fund (Employers Insurance Company of Nevada, formerly known as State Industrial Insurance System) • Self-insurance • Nevada-specific • Classifications • Rates • Experience Rating

  3. Unique Features of Monopolistic Fund • Continuous coverage rather than annual policies • Premium paid in arrears with accompanying payroll report • Mandatory $100 per claim deductible

  4. After July 1, 1999 • Private carriers enter Nevada market • National Council on Compensation Insurance serves as advisory organization • NCCI • Classifications • Rates • Rating plans • Residual market mechanism

  5. Transition to NCCI Rates and Plans • NCCI applies to all policyholders effective July 1, 1999 • New and renewal • Outstanding • Policyholders now purchase annual policies • Paid (at least partially) in advance • Old Nevada and new NCCI premiums widely divergent • Class definitions • Rates • E-mod formulas and rating values

  6. Transition Plan Implemented to Alleviate Large Premium Swings • Calculate average modified rate for each policyholder • Using old Nevada rates and e-mod • Using new NCCI rates and e-mod • New average rate for each policyholder capped at • Old Nevada average modified rate • Plus statewide average rate change • Plus/Minus 25% • Details for subsequent years not yet determined

  7. Individual Carrier Deviations from NCCI Rates • Original plan for deviations • No downward deviations for the 1st year • Up to -5% for the 2nd year • Up to -10% for the 3rd year • Up to -15% for the 4th year • Loss costs after July 1, 2003 • Revised plan for deviations • No downward deviations for the 1st year • Up to -15% for the 2nd year • Loss costs after July 1, 2001

  8. Recent Legislation • Changes to loss cost phase-in period • Employers Insurance Company of Nevada allowed to convert to mutual insurance company • Benefit changes

  9. Reserving in Nevada • Little historical data, and none specific to your company • Mostly paid data used in NCCI filing • Case reserving practices vary by company • Long payout pattern • Benefit Changes • Significant changes in 1993 • Upcoming changes • Potentially volatile effects of economic conditions • Construction, tourism major parts of economy

More Related