Montana. June 28,

Size: px

Start display at page:

Download "Montana. June 28,"

Bethanie Booker
5 years ago
Views:

1 Montana June 28,

2 Montana State Advisory Forum The Video Countrywide Workers Compensation System Montana Workers Compensation System Countrywide and Montana Labor Markets The Data Connection (Video) Legislative Issues Opioids and Workers Compensation 2

3 The Video

4 Countrywide Workers Compensation System

5 Countrywide Workers Compensation (WC) System An Overview Premium decreased slightly in the most recent year The combined ratio continues to show favorable results Frequency declined again at the latest point Medical and indemnity severity increased modestly 5

6 WC Net Written Premium Private Carriers and State Funds $ Billions 50 State Funds Private Carriers p Calendar Year p Preliminary Source: NAIC s Annual Statement data; includes state insurance fund data for the following states: AZ, CA, CO, HI, ID, KY, LA, MD, MO, MT, NM, OK, OR, RI, TX, and UT Each calendar year total for state funds includes all funds operating as a state fund in that year 6

7 WC Direct Written Premium (DWP) Change by Component Private Carriers NCCI States Change in Direct Written Premium: 0.0% 2017 vs Payroll +4.4% Loss Cost and Mix -4.2% Carrier Discounting +0.4% Other Factors -0.4% Sources: DWP Change: NAIC s Annual Statement Statutory Page 14 for all states where NCCI provides ratemaking services Components: NCCI s Policy data 7

8 Increases in Payroll Continue to Drive Changes in Premium Forecast Change Payroll Wage Rate +3.4% Employment 4% +1.6% 4% +1.8% 3% 3% 2% 2% 1% 1% Prof. & Business Services Trade, Transport., & Utilities Education & Health Services Manufacturing Financial Construction Leisure & All Other Activities Hospitality Prof. & Business Services Trade, Transport., & Utilities Education & Health Services Manufacturing Financial Construction Leisure & All Other Activities Hospitality Sources: Moody s Analytics and NCCI 8

9 WC Approved Changes in Bureau Premium Level Weighted by Effective Date NCCI States Percent p Calendar Year -9.6 Source: NAIC s Annual Statement Statutory Page 14 Values reflect changes in average premium levels between years, based on approved changes in advisory rates, loss costs, assigned risk rates, and rating values, as of 5/10/2018 IN and NC are filed in cooperation with state rating bureaus 9

10 WC Impact of Discounting on Premium Private Carriers NCCI States Percent p Policy Year p Preliminary Sources: NAIC s Annual Statement Statutory Page 14 and NCCI s Financial Call data Rate/loss cost departure reflects carrier departure from NCCI rate level, which excludes a profit and contingency provision and expense constant Based on data for all states where NCCI provides ratemaking services, excluding TX 10

11 WC Combined Ratio Underwriting Gain Achieved Private Carriers Percent p p Preliminary Source: NAIC s Annual Statement data Calendar Year 11

12 Percent WC Combined Ratio by Component Private Carriers Dividends 1 2 Underwriting Expense Ratio Loss Adjustment Expense (LAE) Ratio Loss Ratio p p Preliminary Source: NAIC s Annual Statement data Calendar Year 12

13 WC Net Combined Ratios Calendar Year vs. Accident Year As Reported Private Carriers Percent 125 Calendar Year Accident Year p p Preliminary Source: NAIC s Annual Statement data Accident Year information is reported as of 12/31/2017 Includes dividends to policyholders 13

14 Percent WC Lost-Time Claim Frequency Claims per $1M Pure Premium Private Carriers and State Funds NCCI States Average Annual Change: 3.7% ( ) p Accident Year 2010 and 2011 adjusted primarily for significant changes in audit activity p Preliminary based on data valued as of 12/31/2017 Source: NCCI s Financial Call data, developed to ultimate, premium adjusted to current wage and voluntary pure premium level, excludes high-deductible policies; based on data through 12/31/2016 Values displayed reflect the methodology underlying the most recent rate/loss cost filing Includes all states where NCCI provides ratemaking services; WV is excluded through

15 WC Average Indemnity Claim Severity Private Carriers and State Funds NCCI States Severity ($ Thousands) % 4% $23.4 $ p Accident Year p Preliminary based on data valued as of 12/31/2017 Source: NCCI s Financial Call data, developed to ultimate, excludes high-deductible policies; based on data through 12/31/2016 Values displayed reflect the methodology underlying the most recent rate/loss cost filing Includes all states where NCCI provides ratemaking services; WV is excluded through

16 Relative Growth Rates Indemnity Severity vs. Wage Inflation Private Carriers and State Funds NCCI States Changes in indemnity claim severity outpaced changes in wage inflation by 1.9% per year, on average Indemnity claim severity and wages grew at a similar rate p Accident Year Accident Year p Preliminary based on data valued as of 12/31/2017 Sources: Severity: NCCI s Financial Call data, developed to ultimate, excludes high-deductible policies; based on data through 12/31/2016 Values displayed reflect the methodology underlying the most recent rate/loss cost filing Includes all states where NCCI provides ratemaking services; WV is excluded through 2007 US Average Weekly Wage: and , Quarterly Census of Employment and Wages; , NCCI; 2017p, NCCI and Moody s Analytics 16

17 WC Average Medical Lost-Time Claim Severity Private Carriers and State Funds NCCI States Severity ($ Thousands) % 4% $28.8 $ p Accident Year p Preliminary based on data valued as of 12/31/2017 Source: NCCI s Financial Call data, developed to ultimate, excludes high-deductible policies; based on data through 12/31/2016 Values displayed reflect the methodology underlying the most recent rate/loss cost filing Includes all states where NCCI provides ratemaking services; WV is excluded through

18 Relative Growth Rates Medical Severity vs. Price Inflation Private Carriers and State Funds NCCI States Medical lost-time claim severity grew approximately 4.5% per year faster than medical care prices Change in Medical lost-time claim severity and medical care prices tracked one another p Accident Year Accident Year p Preliminary based on data valued as of 12/31/2017 Sources: Severity: NCCI s Financial Call data, developed to ultimate, excludes high-deductible policies; based on data through 12/31/2016 Values displayed reflect the methodology underlying the most recent rate/loss cost filing Includes all states where NCCI provides ratemaking services; WV is excluded through 2007 Personal Health Care (PHC) Chain-Weighted Price Index: Centers for Medicare & Medicaid Services 18

19 Montana Workers Compensation System

20 Montana Workers Compensation System An Overview Premium volume is stable Combined ratios are fairly stable Lost-time frequency continues to decline Medical severity leveled off in the latest year 20

21 Montana Workers Compensation Premium Volume Direct Written Premium in $ Millions Calendar Year Source: NAIC s Annual Statement data 21

22 Impact of Discounting on Workers Compensation Premium in Montana p Policy Year p Preliminary Based on data through 12/31/

23 Montana Combined Ratios Accident Year Accident Year Sources: NCCI s financial data through 12/31/2016 and NAIC s Annual Statement data 23

24 Montana Combined Ratios by Component Accident Year Dividends 12 Expense Ratio 30 Loss Ratio Accident Year Sources: NCCI s financial data through 12/31/2016 and NAIC s Annual Statement data 24

25 Percent Change 10 Montana Workers Compensation Lost-Time Claim Frequency Lost-Time Claims Cumulative Change of 37.0% ( ) Policy Year Based on NCCI s financial data through 12/31/2016, developed to ultimate, premium adjusted to common wage level 25

26 Montana Average Indemnity Claim Severity Lost-Time Claim Severity in $ Thousands 30 Cumulative Change of 5.4% ( ) % +1.1% 10 $21.2 $ Policy Year Based on NCCI s financial data through 12/31/2016, on-leveled and developed to ultimate 26

27 Montana Average Medical Claim Severity Lost-Time Claim Severity in $ Thousands 40 Cumulative Change of +78.1% ( ) +6.8% -0.4% $42.2 $ Policy Year Based on NCCI s financial data through 12/31/2016, on-leveled and developed to ultimate 27

28 Montana Filing Activity Voluntary Loss Cost Changes -3.6% -3.4% -4.8% -7.8% -10.7% 7/1/2014 7/1/2015 7/1/2016 7/1/2017 7/1/

29 Montana July 1, 2018 Loss Cost Filing Overall Loss Cost Level Change: 10.7% Change in Experience: Change in Trend: Change in Benefits: Change in All Other: 6.1% 5.8% 0.8% 0.3% 29

30 Montana July 1, 2018 Filing Average Changes by Industry Group -10.7% -10.2% -11.8% -11.7% -10.5% -9.4% Overall Montana Manufacturing Contracting Office & Clerical Goods & Services Miscellaneous 30

Percent 10 Current NCCI Voluntary Market Loss Cost/Rate Level Changes Excludes Law-Only Filings Approved Pending 5 0 0.4-5 -10-15 -20-16.3-10.

31 Percent 10 Current NCCI Voluntary Market Loss Cost/Rate Level Changes Excludes Law-Only Filings Approved Pending OK NM AR CT OR AL TX NH MD IN CO TN ME NC IL MT WV FL UT GA IA AK KS NE SC SD AZ MS ID RI KY VT DC MO NV HI VA LA Reflects the most recent experience filing in each jurisdiction Due to the timing of the individual loss cost/rate filings, the figures shown may include changes from prior filing seasons 31

32 Current Voluntary Market Rates/Loss Costs Western States Hawaii 1/1/ % Nevada 3/1/ % Idaho Arizona 1/1/2018 1/1/ % -6.4% Alaska 1/1/ % Utah Montana 12/1/2017 7/1/ % -9.4% Colorado Texas Oregon 1/1/2018 7/1/2018 1/1/ % -14.0% -12.7% New Mexico 1/1/ % 32

33 Current Average Voluntary Pure Loss Costs Using Montana Payroll Distribution Pure Loss Cost All Classes MT CO ID NE NV OR SD UT Region Country Based on the latest NCCI approved rates and loss costs in the various states 33

34 Countrywide and Montana Labor Markets

35 National Economic Highlights and Their Impact on Workers Compensation National Economic Indicator Private employment growth continues to be near 2% Wage growth is increasing and expected to accelerate Medical inflation is forecast to rise Short-term and long-term interest rates have increased Potential Impact on the Workers Compensation Market Continuing payroll and premium growth Upward pressure on payroll and premium growth as well as indemnity severity Increases in medical costs per claim Investment yields will increase across the spectrum of bond maturities 35

36 Change in Private Employment Private Employment Growth Is Below Average Percent 4 Montana United States Q4 2016Q4 2017Q4 Year-on-year percentage change; employment is for Total Private Industry Frequency of observation: quarterly; 2014 Q Q4 Sources: US Bureau of Labor Statistics, Moody s Analytics, and NCCI 36

Percent 4 Change in Average Weekly Wages Wage Growth Is Below the Rest of the Nation Montana United States 3 +3.3 +3.2 2 +2.3 +2.3 1 0-1 +0.7 1.

37 Percent 4 Change in Average Weekly Wages Wage Growth Is Below the Rest of the Nation Montana United States Q4 2016Q4 2017Q4 Year-on-year percentage change; wages are for Total Private Industry Frequency of observation: quarterly; 2014 Q Q4 Sources: US Bureau of Labor Statistics, Bureau of Economic Analysis, Moody s Analytics, and NCCI 37

38 Private Industry Payroll Growth Decomposition Payroll Growth Is Lower Than the Nation Percent Payroll AWW Montana +1.7 United States Employment AWW = Average Weekly Wage 2017 Q4 year-on-year percentage change Sources: US Bureau of Labor Statistics, Bureau of Economic Analysis, Moody s Analytics, and NCCI 38

39 Change in Employment by Sector Employment in All Sectors Has Increased in the Past Year Economic Sector Education and health services Leisure and hospitality Professional and business services Government Manufacturing Financial activities Trade, transportation, and utilities Other services Natural resources and mining Information Construction Year-Over-Year Percent Change, 2017Q4 Sector Size % Share 1-Year Change MT , ,200 US +2.1 MT , ,100 US +2.3 MT , US +2.2 MT , US +0.1 MT , US +1.5 MT , US +1.8 MT , US +0.7 MT , US +1.7 MT , US +5.4 MT , US 1.3 MT , US +3.3 Employment numbers are rounded to the nearest hundred Year-on-year percentage change; frequency of observation: quarterly; 2017 Q4 Sources: US Bureau of Labor Statistics, Moody s Analytics, and NCCI 39

40 Montana s Payroll Growth Decomposition by Sector Employment Growth + AWW Growth Payroll Growth 5% +5% Government Trade, transportation, and utilities Education and health services Professional and business services Leisure and hospitality Construction Financial activities Manufacturing Natural resources and mining Other services Information 5% +5% 5% +5% AWW = Average Weekly Wage 2017 Q4 year-on-year percentage change; sectors are in descending order by the volume of state payroll amounts Sources: US Bureau of Labor Statistics, Bureau of Economic Analysis, Moody s Analytics, and NCCI 40

41 Percent 5 Headline Unemployment Rate The Unemployment Rate Is the Same as the National Rate 4 US: 4.1 MT: Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Headline Unemployment Rate, seasonally adjusted Frequency of observation: monthly; latest available data point: March 2018 Source: US Bureau of Labor Statistics (BLS), 41

42 Montana s Labor Market Montana s unemployment rate is the same as the US rate Payroll increased in Montana, primarily driven by strong increases in wages rather than employment Payroll growth was largest in the Education and Health Services sector Both the Financial Activities and Leisure and Hospitality sectors also had strong payroll growth Employment growth is below the US rate The Professional and Business Services sector added a large number of jobs and grew at the fastest rate The Education and Health Services and Leisure and Hospitality sectors were among those adding the most jobs 42

43 The Data Connection (Video)

44 Legislative Issues

45 Legislative Overview for 2018 As of March 2018: NCCI has tracked approximately 753 state and federal workers compensation-related bills 450 of the bills are in NCCI states 25 bills enacted (includes all jurisdictions and federal) 45

46 2018 Workers Compensation Legislative Activity CA OR WA NV ID UT MT WY CO ND SD NE KS MN IA MO WI IL MI IN OH KY WV PA VA NY VT NH CT MA DC ME NJ DE MD RI AZ NM OK AR TN SC NC MS AL GA AK TX LA FL HI States Not in Session 0 10 Bills Introduced Bills Introduced Bills Introduced More Than 30 Bills Introduced As of 5/2/

47 Key Workers Compensation-Related Themes in Introduced Legislation 2018 Top 5 Workers Compensation Legislative Trends First Responders Court/Legal Issues Reimbursement/Fee Schedule Benefits/Coverage Compliance 47

48 NCCI s Engagement at the Federal Level NCCI works with Congress and federal agencies to educate and inform public policymakers on the impact of legislative and regulatory issues on the state-based workers compensation system. NCCI provides information and insights to several federal agencies, including: US Department of Labor (USDOL) National Institute for Occupational Safety and Health (NIOSH) Government Accountability Office (GAO) US Department of the Treasury 48

49 Federal Emerging Issues Regulation of Air Ambulance Services Sen. Jon Tester (MT) introduced legislation to provide state authority Federal Aviation Administration Reauthorization Social Security Disability Insurance (SSDI) Reform SSDI Solutions Initiative recommendations Trump Administration SSDI Reverse Offset Proposal Medicare Set-Aside (MSA) Reform Legislation to be introduced to bring greater efficiency to the MSA process Congressional Budget Office scoring 49

50 Opioids and Workers Compensation

51 What Is a Prescription Opioid? Prescription opioids are a class of drugs used to treat moderate to severe pain, particularly chronic intractable pain Prescription opioids include oxycodone (OxyContin ), hydrocodone (Vicodin ), and morphine Opioids bind to and activate opioid receptors on cells in the brain and body Pain signals are blocked, and large amounts of dopamine are released Misuse of opioids can slow down breathing, which can lead to death 51

52 How Did We Get Here? Physicians interviewed by NCCI point to four key factors that led to the rise in opioid prescribing and consumption: 52

53 Background According to the US Department of Health and Human Services (HHS), in 2016: 11.5 million Americans misused prescription opioids 2.1 million reported an opioid disorder 116 died every day from an opioid-related overdose According to the Centers for Disease Control and Prevention (CDC), in 2016: 40% of opioid overdose deaths involved a prescription opioid The number of overdose deaths involving prescription opioids was five times higher than in 1999 The US prescribing rate for opioids was 61 prescriptions per 100 persons 53

Impact on Workers Compensation According to NCCI s data, injured workers who were prescribed at least one prescription in 2016 received three times as many

54 Impact on Workers Compensation According to NCCI s data, injured workers who were prescribed at least one prescription in 2016 received three times as many opioid prescriptions as the US opioid prescribing rate Workers compensation is directly impacted because injured workers are often prescribed opioids for pain 54

55 Opioids Are a Significant Share of Prescription Drug (Rx) Costs Two in five Rx claims received an opioid in Service Year (SY) 2016 Claims Costs The average cost of an opioid Rx claim is four times that of a nonopioid Rx claim One in four dollars spent for Rx s in workers compensation is for opioids Spend Source: NCCI s Medical Data Call, Service Year 2016; states included are AK, AL, AR, AZ, CO, CT, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MD, ME, MI, MN, MO, MS, MT, NC, NE, NH, NM, NV, OK, OR, RI, SC, SD, TN, UT, VA, VT, and WI 55

56 Top 10 Workers Compensation Opioid Drugs by Prescription Counts for Countrywide Name of Opioid Drug Type B/G % of Drug Prescriptions PPU Countrywide Hydrocodone Bitartrate-Acetaminophen G 9.7% $0.58 Tramadol HCl G 5.1% $1.16 Oxycodone HCl-Acetaminophen G 4.7% $1.76 Oxycodone HCl G 2.8% $1.27 Oxycontin B 1.2% $8.43 Morphine Sulfate G 1.1% $2.24 Acetaminophen-Codeine Phosphate G 0.6% $0.47 Hydromorphone HCl G 0.4% $1.97 Fentanyl Transdermal System G 0.3% $21.89 Methadone HCl G 0.3% $0.24 Source: NCCI s Medical Data Call, Service Year 2016; states included are AK, AL, AR, AZ, CO, CT, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MD, ME, MI, MN, MO, MS, MT, NC, NE, NH, NM, NV, OK, OR, RI, SC, SD, TN, UT, VA, VT, and WI 56

57 State Regulator Perspective State regulators interviewed by NCCI shared that tools in the fight against the opioid epidemic include: 57

State Activity In 2016, governors from 40 states signed a compact to fight opioid addiction by adopting a series of steps with the following goals: Reduce inappropriate opioid prescribing Understand

58 State Activity In 2016, governors from 40 states signed a compact to fight opioid addiction by adopting a series of steps with the following goals: Reduce inappropriate opioid prescribing Understand opioids and addiction better Ensure a pathway to recovery for individuals with addiction This resulted in several states adopting rules and laws, including: Prescribing guidelines Drug formularies PDMPs 58

physician dispensing and repackaged drugs PDMPs Choice of pharmacy Compound drugs

59 2018 State Activity In 2018, a large majority of states considered prescription drug legislation or regulatory changes, including: Drug formularies Limitation on physician dispensing and repackaged drugs PDMPs Choice of pharmacy Compound drugs Prescription drug fee schedules Pharmaceutical benefit management Drug rehabilitation 59

60 Federal Activity Federal: New Initiative to Stop Opioid Abuse and Reduce Drug Supply and Demand CDC Guidelines provide recommendations for prescribing opioid pain medication Prescription Drug Monitoring Act of

61 Claims Professionals Perspective Claims professionals interviewed by NCCI say that there are four key elements that are critical for successfully managing claims involving opioids: 61

62 Potential Alternative Treatments Nondrug Treatments Physical therapy Yoga Acupuncture Massage therapy Drug Treatments NSAIDs Gabapentin Lidocaine Acetaminophen Ibuprofen Lidocaine Medical Marijuana? 62

63 63

64 Closing Remarks

65 Supplemental Information

66 Total Benefit Costs in Montana 32% 68% 38% 62% 42% 58% Indemnity Medical Regional states are CO, ID, NE, NV, OR, SD, and UT Based on NCCI s financial data through 12/31/

67 Montana Indemnity and Medical Loss Ratios 0.73 Indemnity Medical Policy Year Based on NCCI s financial data through 12/31/2016 at current benefit level and developed to ultimate 67

Indemnity Loss Ratio (Loss/Premium) Frequency (Claims/

68 What Drives Indemnity and Medical Loss Ratios? Frequency (Claims/ Premium) Indemnity Severity (Loss/Claim) Indemnity Loss Ratio (Loss/Premium) Frequency (Claims/ Premium) Medical Severity (Loss/Claim) Medical Loss Ratio (Loss/Premium) 68

69 Montana Claim Frequency Per Million of On-Leveled Premium Policy Year Based on NCCI s financial data through 12/31/2016 adjusted to a common wage level 69

70 Montana Average Indemnity Claim Severity Average Indemnity Claim Severity ($ '000s) 36.5 Adjusted to Common Wage Level Actual AY 2016 Policy Year Based on NCCI s financial data through 12/31/2016 for lost-time claims at current benefit level and developed to ultimate 70

71 Montana Average Medical Claim Severity Average Medical Claim Severity ($ '000s) Adjusted to Common Wage Level Actual AY 2016 Policy Year Based on NCCI s financial data through 12/31/2016 for lost-time claims at current benefit level and developed to ultimate 71

72 TX AR WV IN UT KS DC TN NV OR MS NC SD AZ AL NM NE CO OK VA MD HI MO KY NH ME IA ID FL LA SC RI GA AK IL VT MT CT CW Current Average Voluntary Pure Loss Costs Using Montana Payroll Distribution Pure Loss Costs All Classes Based on the latest NCCI approved rates and loss costs in the various states State 72

73 Montana Average Claim Frequency Frequency per 100,000 Workers All Claims Montana 1,137 4,016 5,153 Colorado 4,183 Idaho 5,244 Nebraska 3,602 Nevada 5,143 Oregon 4,638 South Dakota 4,598 Utah 3,764 Lost-Time Medical Only Based on NCCI s Statistical Plan data 73

74 Average Indemnity Claim Severity in the Region Lost-Time Claim Severity in $ Thousands PY 2014 PY MT CO ID NE NV OR SD UT Based on NCCI s financial data 74

75 Average Medical Claim Severity in the Region Lost-Time Claim Severity in $ Thousands PY 2014 PY MT CO ID NE NV OR SD UT Based on NCCI s financial data 75

76 Montana Distribution of Claims by Injury Type 78% 19% 3% 0% 77% 14% 9% 0% 75% 15% 10% 0% Medical Only Temporary Total Permanent Partial Fatal & Permanent Total Regional states are CO, ID, NE, NV, OR, SD, and UT Based on NCCI s Statistical Plan data for jurisdiction/claim type combinations for which three or more cases exist 76

77 Montana Indemnity Loss Distribution by Injury Type 47% 49% 4% 23% 66% 4% 7% 33% 57% 4% 6% Temporary Total Permanent Partial Permanent Total Fatal Regional states are CO, ID, NE, NV, OR, SD, and UT Based on NCCI s Statistical Plan data for jurisdiction/claim type combinations for which three or more cases exist 77

78 Montana Medical Loss Distribution by Injury Type 45% 36% 18% 1% 22% 57% 6% 14% 1% 30% 47% 9% 13% 1% Temporary Total Permanent Partial Permanent Total Medical Only Fatal Regional states are CO, ID, NE, NV, OR, SD, and UT Based on NCCI s Statistical Plan data for jurisdiction/claim type combinations for which three or more cases exist 78

79 Glossary

80 Glossary Assigned Risk Adjustment Program (ARAP) An assigned risk market program that surcharges residual market risks based on the magnitude of their experience rating modification. Calendar Year (CY) Experience of earned premium and loss transactions occurring within the calendar year beginning January 1, irrespective of the contractual dates of the policies to which the transactions relate and the dates of the accidents. Calendar-Accident Year (AY) The accumulation of loss data on all accidents with the date of occurrence falling within a given calendar year. The premium figure is the same as that used in calendar year experience. Claim Frequency The number of claims per unit of exposure; for example, the number of claims per million dollars of premium or per 100 workers. 80

81 Glossary Claim Severity The average cost of a claim. Severity is calculated by dividing total losses by the total number of claims. Combined Ratio The sum of the (1) loss ratio, (2) expense ratio, and (3) dividend ratio for a given time period. Detailed Claim Information (DCI) An NCCI Call that collects detailed information on an individual workers compensation losttime claim basis, such as type of injury, whether or not an attorney was involved, and the timing of the claim s report to the carrier. Direct Written Premium (DWP) The gross premium income adjusted for additional or return premiums, but excluding any reinsurance premiums. 81

82 Glossary Indemnity Benefits Payments by an insurance company to cover an injured worker s time lost from work. These benefits are also referred to as wage replacement benefits. Loss Ratio The ratio of losses to premium for a given time period. Lost-Time (LT) Claims Claims resulting in indemnity benefits (and usually medical benefits) being paid to or on behalf of the injured worker for time lost from work. Medical-Only Claims Claims resulting in only medical benefits being paid on behalf of an injured worker. Net Written Premium (NWP) The gross premium income adjusted for additional or return premiums and including any additions for reinsurance assumed and any deductions for reinsurance ceded. 82

83 Glossary Permanent Partial (PP) A disability that is permanent but does not involve a total inability to work. The specific definition and associated workers compensation benefits are defined by statute and vary by jurisdiction. Policy Year (PY) The year of the effective date of the policy. Policy year financial results summarize experience for all policies with effective dates in a given calendar year period. Schedule Rating A debit and credit plan that recognizes variations in the hazard-causing features of an individual risk. Take-Out Credit Program An assigned risk program that encourages carriers to write current residual market risks in the competitive voluntary marketplace. Temporary Total (TT) A disability that totally disables a worker for a temporary period of time. 83

84 Appendix

85 NCCI s Worker Compensation Resources Financial Aggregate Calls Used for aggregate ratemaking Statistical Plan for Workers Compensation and Employers Liability Insurance (Statistical Plan) Used for class ratemaking Detailed Claim Information In-depth sample of lost-time claims Policy Data Policy declaration page information 85

86 Financial Aggregate Calls Collected Annually Policy and calendar-accident year basis Statewide and assigned risk data Premiums, Losses, and Claim Counts Evaluated as of December 31 Purpose Basis for overall aggregate rate indication Research 86

87 Policy Year Financial Aggregate Data Policy Expiration Date Policy Year 2012 Policy Year 2013 Policy Year /1/2012 1/1/ /31/2013 1/1/ /31/2016 Policy Effective Date 87

88 Calendar-Accident Year Financial Aggregate Data Policy Expiration Date Calendar- Accident Year 2013 Calendar- Accident Year 2014 Calendar- Accident Year /1/2013 1/1/ /31/2014 1/1/ /31/2017 Policy Effective Date 88

89 Statistical Plan for Workers Compensation and Employers Liability Insurance (Statistical Plan) Data Experience by Policy Detail Exposure, premium, and experience rating modifications Individual claims by injury type Purposes Classification relativities Experience Rating Plan Research 89

90 Valuation of Statistical Plan Data 1st Report Valuation 2nd Report Valuation 3rd Report Valuation 4th Report Valuation 5th Report Valuation Policy Effective 18 Months 42 Months 66 Months 30 Months 54 Months 90

Maryland. September 7,

Maryland. September 7, Maryland September 7, 2018 David_Benedict@ncci.com 804-380-3005 Dawn_Ingham@ncci.com 561-893-3165 Robert_Moss@ncci.com 561-893-3794 Maryland State Advisory Forum The Future@Work (Video) Countrywide Workers