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Workers’ Compensation

The Property & Casualty Section of the Division of Insurance handles such duties as reviewing and approving workers’ compensation policy rates, language, composition and format, as well as collecting quarterly and annual financial statements from private workers’ compensation insurers.

Average Decrease in Voluntary Insurance Loss Costs and Assigned-Risk Market Rates, Effective March 1, 2017: Commissioner Barbara D. Richardson has approved a filing from the National Council on Compensation Insurance ("NCCI") for an average decrease of 10.7 percent for Nevada workers’ compensation voluntary insurance loss costs. An average decrease of 10.5 percent for workers’ compensation insurance assigned-risk rates was also approved. The filing will take effect on March 1, 2017. This decrease in loss costs is the largest since NCCI’s 2004 filing when loss costs decreased by an average of 12.3 percent. The decrease in assigned-risk rates is the largest in Nevada history since workers’ compensation insurance was privatized in 1999.

The majority of the decrease in loss costs is due to combined favorable changes in loss experience and favorable changes in loss development. This suggests that the amount of reported workers’ compensation claims will not grow over time by as large a proportion as previously anticipated. Both indemnity and medical loss components of workers’ compensation, as analyzed by NCCI in its recently approved filing, showed improved experience and favorable loss development. In particular, frequency of workers’ compensation losses has continued a pattern of significant declines, which has been observed in much of the United States.

The reduction in assigned-risk rates takes into account the factors affecting the voluntary market, as well as information specific to the assigned-risk market. The assigned-risk market rates will experience a slightly milder overall decrease than the voluntary-market loss costs, because of an approximate 0.2 percent projected increase in assigned-risk servicing expenses – but a substantial 10.5 percent overall decrease will still result.

The table below illustrates by industry group the proposed average changes:

Industry Group Average Voluntary Loss-Cost Change   Average Assigned-Risk Rate Change
Contracting               -9.8%              -9.6%
Goods & Services             -10.8%             -10.6%
Manufacturing              -8.6%              -8.4%
Office & Clerical             -11.0%             -10.8%
Miscellaneous             -12.4%             -12.2%

 

The changes vary by classification. Class changes are as much as 20 percent above or below the average loss-cost change for the classification’s industry group. For example, for classification 5645, "carpentry – detached one or two-family dwellings," the proposed change in the loss cost is a decrease of 11.0 percent.

Impacts to each individual classification of business will vary based on that classification’s recent experience. The range of impacts to the loss costs will be between -30.9% and +16.7%. A sizable majority of classifications will receive loss-cost decreases, often substantial decreases, as a result of this filing.

Most of the methodology and assumptions utilized by NCCI have remained constant or close to constant when compared to prior years. The changes that have been implemented are generally favorable to reducing the cost of workers’ compensation insurance in Nevada.

The overall 10.7% loss-cost decrease for the voluntary market is driven by the following considerations (impacts may not add to exactly -10.7% due to rounding):

  • -9.3% impact due to combined changes in loss experience and favorable changes in loss development, which suggest that the amount of reported workers’ compensation claims will not grow over time by as large a proportion as was previously anticipated. Workers’ compensation losses consist of indemnity and medical components. Improved experience in indemnity losses resulted in an impact of -7.4% on that component of losses, while revised loss-development assumptions resulted in a further impact of -2.9%. Improved experience in medical losses resulted in an impact of -7.0% on that component of losses, while revised loss-development assumptions resulted in a further impact of -1.9%. Averaging the impact of indemnity and medical losses, based on the relative prevalence of such losses, results in a total impact of -9.3%.
  • -3.0% impact due to changes in trend assumptions, primarily a result of revising the projected annual indemnity loss-ratio trend from -2.5% to -3.0% and revising the projected annual medical loss-ratio trend from -1.5% to -2.5%. The indemnity and medical loss ratios have historically decreased for three consecutive years, and NCCI is projecting continued decreases in the future.
  • +1.3% impact due to benefit changes. Of this increase, +1.0% is due to changes in the Medical Fee Schedule issued by the Division of Industrial Relations – which took effect on February 1, 2016. The remaining +0.3% impact is the result of the increases in the maximum weekly benefit amounts effective July 1, 2016. It is noteworthy that the major loss-cost and rate decreases proposed by NCCI coincide with modest increases to workers’ compensation benefits. Therefore, benefit adequacy is not being eroded; rather, historical and estimated prospective loss experience is sufficiently favorable to justify substantial decreases in the cost of workers’ compensation coverage for most classifications of employers.
  • +0.2% impact due to an increase in the provision for loss-adjustment expenses from 16.2% to 16.4% of losses.

Adoption of Revised Loss Costs: The revised loss costs must be adopted on their effective date and applied to all policies on or after the effective date.

Insurers need only file new loss-cost multiplier worksheets if they are changing their loss-cost multipliers. Otherwise, the current loss-cost multipliers will continue to apply.

Large Deductible Workers’ Compensation Program Filing Requirement: As outlined in Bulletin 00-003, insurers are required to file each risk written with a Large Deductible ($25,000 or greater). Form NDOI-1112 (Revised June 2012), the Informational Filing for Large Deductible Workers’ Compensation, must be submitted to the Commissioner for acceptance within 60 days of issuing the applicable Large Deductible policy.

For information regarding self-insured associations and self-insured employers, please see the Division of Insurance’s Self-Insured Section.

For information regarding employer workers’ compensation coverage compliance, claims handling and complaints, please contact the Division of Industrial Relations.

To report workers’ compensation fraud, please contact the Attorney General’s Workers' Compensation Fraud Unit.

Workers’ Comp Resources

NCCI Circular: Approval of Voluntary Loss Costs and Rating Values and Assigned-Risk Rates to Be Effective March 1, 2017 

Advisory Loss Costs and Rating Values Effective 3/1/2017 

Assigned-Risk Rates and Rating Values Effective 3/1/2017 

NCCI Circular: Approval of Voluntary Loss Costs and Rating Values and Assigned-Risk Rates to Be Effective March 1, 2016

Advisory Loss Costs and Rating Values Effective 3/1/2016

Assigned-Risk Rates and Rating Values Effective 3/1/2016

NCCI Circular: Approval of Voluntary Loss Costs and Rating Values and Assigned-Risk Rates to Be Effective March 1, 2015

Advisory Loss Costs and Rating Values Effective 3/1/2015

Assigned-Risk Rates and Rating Values Effective 3/1/2015

NCCI Circular: Approval of Voluntary Loss Costs and Rating Values and Assigned-Risk Rates to Be Effective March 1, 2014

Advisory Loss Costs and Rating Values Effective 3/1/2014

Assigned-Risk Rates and Rating Values Effective 3/1/2014

NCCI Circular: Approval of Voluntary Loss Costs and Rating Values and Assigned-Risk Rates to Be Effective March 1, 2013

Advisory Loss Costs and Rating Values Effective 3/1/2013

Assigned-Risk Rates and Rating Values Effective 3/1/2013

NCCI Circular: Approval of Voluntary Loss Costs and Assigned Risk Rates to Be Effective March 1, 2012

Advisory Loss Costs and Rating Values Effective 3/1/2012

Assigned Risk Rates and Rating Values Effective 3/1/2012

Advisory Loss Costs and Rating Values Effective 3/1/2011

Assigned Risk Rates and Rating Values Effective 3/1/2011

Advisory Loss Costs and Rating Values Effective 3/1/2010

Assigned Risk Rates and Rating Values Effective 3/1/2010

Advisory Loss Costs and Rating Values Effective 3/1/2009

Assigned Risk Rates and Rating Values Effective 3/1/2009

Rate Filings / Loss-Cost Expense Worksheet

Workers’ Compensation Issues: Bulletin 00-002

Workers’ Compensation Deductible Programs: Bulletin 00-003

Terrorism Coverage Cannot be Excluded From Nevada Workers’ Compensation Insurance Policies: Bulletin 03-002