NCCI’s 2016 Annual Issues Symposium
Regulatory and Legislative
Trends
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
NCCI’s 2016 Annual Issues Symposium
Highlights
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
2016 Legislative Sessions
WA
ME
MT
ND
OR
VT
MN
ID
IA
NE
UT
CA
OK
NM
VA
KY
TX
MD
DC
NC
TN
AR
SC
MS
AK
RI
DE
WV
MO
NJ
OH
IN
CO
KS
AZ
PA
IL
MA
CT
MI
WY
NV
NH
NY
WI
SD
AL
GA
LA
FL
HI
States With
2015/2016
Carryover
States With
2016/2017
Biennium
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
States With
No
Carryover
States With
No Regular
Session in
2016
3
2016 Limited Scope Legislative Sessions
 Arkansas
 Connecticut
 Maine
 New Mexico
 North Carolina
 Wyoming
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4
2016 WC Legislative Activity by State
WA
ME
ND
MT
OR
VT
MN
ID
WY
NV
PA
IL
UT
CO
AZ
MI
IA
NE
CA
NY
WI
SD
OK
NM
RI
NJ
DE
WV
VA
KY
MD
DC
NC
TN
AR
SC
MS
GA
AL
LA
TX
AK
MA
CT
OH
IN
MO
KS
NH
FL
HI
As of April 1, 2016
0–10 Bills
Introduced
11–20 Bills
Introduced
21–30 Bills
Introduced
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More Than
30 Bills
Introduced
No Session
in 2016
5
Total Relevant Workers Compensation-Related
Bills in 1st Quarter 2016
Relevant Workers Compensation‐
Related Bills
Total1
Monitored2
660
Enacted
7
42
Defeated3
These numbers include bills from all states and the District of Columbia that were prefiled or introduced between January 1, 2015, and
March 5, 2016 (including those measures that were prefiled or carried over from 2015)
Includes 2015 pending, defeated, and enacted bills, as well as 2017 draft bills
3 Includes failed, failed-adjourned, or vetoed bills
1
2
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6
Key Workers Compensation-Related Topics in
2016 Legislation
 First Responder Presumption
 Employer/Employee Definition
 Medical Cost Management
 Independent Contractors and Misclassification
 Exclusive Remedy
 Opt-Out
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7
First Responder Initiatives
 Broadening the definition of a first responder




Firefighters
Law enforcement officers
Emergency workers
Volunteer emergency workers
 Broadening the scope of covered diseases
presumed compensable for first responders
 Clarifying terms of a rebuttal against
presumption of compensability
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8
Residual Market Policies That Cover Firefighters
For states where NCCI administers the residual market
WV was added in 2011; TN was added in mid-2015
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9
Employer/Employee Definitions
 The employment status of volunteers
 Coverage election for executive officers and
others
 Coverage for owner-operators of vehicles
 Excluded employments
 The employment status of personal care
attendants and the agencies that employ them
 The employee status of leased and temporary
workers
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10
Medical Cost Management Matters
 Medical cost-related topics include:



Requiring the development of a medical fee schedule
Clarifying the applicability of a medical fee schedule
Addressing utilization review practices
 Different types of medical fee schedules include:




Physicians
Hospital inpatient/outpatient
Ambulatory surgical centers
Prescription drugs (and drug formularies)
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11
Drug Formulary

States Recently Instituting Drug Formularies:
 Tennessee Rule 0800-02-05, effective August 28, 2016
 California AB 1124, effective July 1, 2017

Recent Legislation Proposing Formularies:
 Nebraska LB 1005, deferred due to prioritization
 Louisiana HB 725

Recent Regulations Proposing Formularies:
 Arizona—Rules R20-5-1301 through 1312
 Nevada guidelines

Study to Explore Feasibility of Implementation:
 North Carolina has completed the study required in HB 97,
recommending further review and postponing
implementation to no earlier than 7/1/2018
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12
Independent Contractors and Misclassification
 Creating or clarifying criteria for independent
contractors
 Prohibiting the misclassification of employees as
independent contractors
 Prescribing penalties for misclassification
 Establishing that drivers for Transportation
Network Companies are independent contractors
 Defining “Qualified Marketplace Contractor” as an
independent contractor
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13
Exclusive Remedy
Most measures introduced clarify circumstances or
conditions under which workers compensation is (or
is not) the exclusive remedy, such as:
 When injury stems from an abusive work
environment
 Certain death cases
 Situations involving willful intent
 Under certain “opt-out” provisions
 In borrowed-employee arrangements
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14
Opt-Out
Introduced, but no further action has been taken:*

South Carolina Employee Injury Benefit Plan
Alternative (HB 4197)

Tennessee Employee Injury Benefit Alternative
(HB 997/SB 721)
*As of April 1, 2016
15
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Number of Requests to NCCI for Pricing of
Law/Regulation Changes in the Last Five Years
200
175
172
150
125
147
136
147
120
100
75
50
25
0
2011
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
2012
2013
16
2014
2015
Number of 1st Quarter Requests to NCCI
for Pricing of Law/Regulation Changes
in the Last Five Years
120
105
100
83
78
80
77
61
57
60
40
20
0
2011
2012
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2013
2014
2015
2016
17
2016 Law-Only Loss Cost Filings
 Tennessee
–2.7% impact of Rule 0800-02-25
Drug Formulary and Medical Treatment Guidelines
 Alaska
–3.7% impact of medical fee schedule changes
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18
Measures Calling for System Studies

Hawaii HB 2715 calls for a closed claim study of the
workers compensation system

Vermont HB 803 creates a committee to study
portable employment benefits, to address the needs
of workers in an on-demand environment

Kentucky HCR 185 creates a task force to study the
state’s workers compensation system and develop
recommendations to enhance the system

Connecticut HB 5506 requires a study of the liability
of employers for hospital services

Utah SB 216 requires a study of hospital costs
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
19
Unique but Potentially Significant Workers
Compensation Measures

Hawaii HB 2715 originally called for the creation of a
monopolistic state fund, but was amended to require a
closed claim study

Illinois SB 2598 calls for the premium for contractors
classifications to be based on hours worked rather than
payroll

Illinois HB 2552 and HB 5925 create a private, not-forprofit workers compensation insurance company

Vermont SB 213 creates a new category of benefit—
parental leave—to be provided as a workers compensation
benefit

Virginia HB 1108 prohibits the use of a specific experience
modification as a criteria for awarding contracts
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
20
General Observations on 2016 Workers
Compensation Legislation

Legislative activity for 2016 is about normal for an election
year

No significant workers compensation measures have
progressed

Opt-out proposals in South Carolina and Tennessee have thus
far failed to advance

The financial impact on the state workers compensation system
of legislation priced in 2016 ranged from –3.7% to +6.0%

New terminology has emerged regarding the gig economy and
independent contractors: “Qualified Marketplace Contractor”
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
21
For Perspective:
Countrywide Legislative Activity in 2015
AllAll Introduced Bills
Introduced
All
Legislative Bills
All Legislation
Measures
All WC Bills
WC Enacted
Enacted WC Bills
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22
Regulations Proposed and/or Adopted
in 2016
 The majority of regulations proposed or adopted
thus far in 2016 address medical costs:
 Medical fee schedules
 Medical treatment guidelines
 Billing procedures
 Other topics include:




Reporting requirements
Dispute resolution
Attorney fees
Large deductibles
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
23
Why Does NCCI Monitor Regulatory and
Legislative Changes?



To understand/explain fluctuations in system costs

To develop filings, which make any necessary
changes to rating plans, rules, and forms

To adjust rates/loss costs as necessary to comply
with rate standards: that rates shall be reasonable
and neither excessive, nor inadequate, nor unfairly
discriminatory
To serve as a resource to stakeholders
To provide objective cost-impact information to
stakeholders during the decision-making process
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
24
NCCI’s 2016 Annual Issues Symposium
Case Law Highlights
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Workers Compensation Litigation That
Inspired Legislation in 2016

Wheeler v. Cinna Bakers
Aggregation of benefits from multiple employments (South Dakota HB 1084
was enacted effective [retroactive to] 5/5/2015)

Greer v. Sysco Foods
Maximum Medical Improvement as a factor in the termination of Temporary
Total Disability benefits (Missouri SB 1027, pending as of 4/1/2016)

Quad/Graphics, Inc. v. Mario Holguin
Modified-duty wages in addition to Temporary Total Disability Benefits
(Kentucky SB 151, pending as of 4/1/2016)

Neel v. Western Construction, Inc.
No obligation to pay more for medical services than the fee schedule or rule
applicable on the date of service requires (Idaho HB 435, which died)

Rodriguez v. Brand West Dairy
Constitutionality of the farm and ranch workers exclusion (New Mexico SB 283,
which died)
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
26
Key State Supreme Court Decisions
Pending in 2016

Ramirez-Trujillo v. Quality Egg, LLC
Iowa—Payment of medical costs for nonwork-related
treatment

Rodriguez v. Brand West Dairy
New Mexico—Constitutionality of the farm/ranch laborer
exclusion

Westphal v. City of St. Petersburg
Florida—Constitutionality of limitation on benefits

Castellanos v. Next Door Company
Florida—Attorney fees

Stahl v. Hialeah Hospital
Florida—Exclusive remedy
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
27
Key Judicial Decisions in 2016

Vasquez v. Dillards
The Oklahoma Workers Compensation Commission declared Opt-Out
unconstitutional. Appeal to the Oklahoma Supreme Court is pending.

Maxwell v. Sprint, PCS
The Oklahoma Supreme Court declared a provision of the state's workers
compensation act that defers benefits for injured employees who return to
work is unconstitutional.

Sturgess v. OA Logistics Services, Inc.
The Georgia Court of Appeals ruled on exclusive remedy that death from
an injury sustained outside of the office was not work-related. A petition
for discretionary review is pending before the Georgia Supreme Court.

Nebraska and Oklahoma v. Colorado
The US Supreme Court refused to hear this suit regarding Colorado’s
legalization of marijuana.
As of April 13, 2016
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28
NCCI’s 2016 Annual Issues Symposium
Election 2016
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2016 Commissioner Changes
 Arizona
 Kentucky
 Nevada
 New York
 Rhode Island
Information as of April 1, 2016
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30
2016 Governor Elections
States Where Commissioners Are Appointed
States Where Commissioners
Are Elected
Indiana
Delaware*
Missouri*
Montana
New Hampshire*
North Carolina
Oregon
North Dakota*
Utah
Washington
Vermont*
West Virginia*
Information as of April 1, 2016
*Open races—Incumbent is termed out or not running for reelection
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31
2016 Commissioner Elections
Incumbents Running
Open Election
Delaware
Montana
North Carolina
North Dakota
Washington
Information as of April 1, 2016
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32
Key 2016 Ballot Initiatives


Certified for November 2016 ballot:

Colorado Initiative 20, creating Amendment 69, a
universal healthcare system including medical
portion of workers compensation

Florida Right to Medical Marijuana Initiative,
Amendment 2

Nevada Initiative to Regulate and Tax Marijuana
In addition, across the country there are more than
50 potential marijuana initiatives awaiting certification
for the November 2016 ballot
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
33
NCCI’s 2016 Annual Issues Symposium
Residual Markets
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Residual Market States
by Policy Count
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
ID DC AL SD WV MS NM VT IA NV NH TN AZ AR AK KS OR SC CT VA GA IL
Annual data for policies reported through December 31, 2015
Total number of all Assigned Risk Plan policies with effective dates during 2015 in states where NCCI is the Plan Administrator
35
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
Residual Market States
By Premium
$120,000,000
$100,000,000
$80,000,000
$60,000,000
$40,000,000
$20,000,000
$0
ID DC SD AL NM WV MS VT NV AR NH TN SC AK KS IA OR AZ CT GA VA IL
Annual data for policies reported through December 31, 2015
Total number of all Assigned Risk Plan policies with effective dates during 2015 in states where NCCI is the Plan Administrator
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
36
Residual Market Share
As a Percentage of Total Written Premium
12%
10%
8%
6%
4%
2%
0%
ID AL TN IL SC NM GA IA MS DC OR SD CT WV NV VA AZ KS NH VT AR AK
Only NCCI-managed residual markets are reflected
Preliminary for 2015
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37
Residual Market Share
As a Percentage of Total Policies
60%
50%
40%
30%
20%
10%
0%
ID AL IA AZ TN WV DC SD MS NM OR NV VA GA IL
Only NCCI-managed residual markets are reflected
Preliminary for 2015
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38
KS SC AR NH CT VT AK
Average Residual Market Policy Size
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
ID SC GA IL AR KS CT VA AK NM OR NV NH VT TN DC SD WV MS AL AZ IA
Only NCCI-managed residual markets are reflected
Preliminary for 2015
39
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
Residual Market Demographics
Top Five Classification Codes
As of 12/31/2015
Policy Count
Premium
• 5645—Carpentry (8.4%)
• 5645—Carpentry (6.0%)
• 5437—Carpentry, Interior Trim
(5.3%)
• 7228—Trucking, Local (3.8%)
• 5551—Roofing (3.6%)
• 5474—Painting (4.8%)
• 7228—Trucking, Local (4.0%)
• 7229—Trucking, Long Distance
(3.0%)
• 5551—Roofing (2.9%)
• 5474—Painting (2.3%)
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
40
Voluntary Coverage Assistance Program
(NCCI’s VCAP® Service)
Overall Savings
$1,340,600 $770,750
$738,020
$842,636
$585,745
2011
2012
2013
2014
2015
As of April 1, 2016
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
41
Voluntary Coverage Assistance Program
(NCCI’s VCAP® Service)
Average Savings per Application
$1,635
$1,609
$1,350
$1,200
$1,148
2011
2012
2013
As of April 1, 2016
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42
2014
2015
PEO and Other Staffing Accounts
Bound in the Residual Market
1000
900
800
Policies
700
600
500
400
300
200
100
0
Policies
2010
538
2011
412
2012
671
2013
789
2014
820
2015
880
43
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
Residual Market Turnover
All NCCI Plan States
Policies Policies Transitioned to Unidentified—
Voluntary—
Percentage
Percentage
Overall Market Turnover
Policy Year
AR Policy Count
2012
131,929
6.4%
26.8%
33.2%
2013
148,256
7.1%
25.2%
32.3%
2014
162,511
7.9%
25.6%
33.5%
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44
NCCI’s 2016 Annual Issues Symposium
Premium
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
Top Five States With Largest Workers
Compensation Direct Written Premium
Calendar Year 2014
12,000
$ Millions
10,000
8,000
6,000
4,000
2,000
0
CA
NY
TX
IL
PA
Private carrier data compiled from 2014 Annual Statements as reported to NAIC
State Fund data compiled from Annual Statements and as published in A.M. Best's Aggregates and Averages, monopolistic states excluded
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
46
Top Five States With Smallest Workers
Compensation Direct Written Premium
Calendar Year 2014
250
$ Millions
200
150
100
50
0
DC
SD
VT
DE
RI
Private carrier data compiled from 2014 Annual Statements as reported to NAIC
State Fund data compiled from Annual Statements and as published in A.M. Best's Aggregates and Averages, monopolistic states excluded
47
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
Top Five States With the Largest Five-Year
Change in Direct Written Premium (DWP)
12,000
+65.8%
$ Millions
10,000
8,000
6,000
+53.7%
CY 2009 DWP
CY 2014 DWP
4,000
+49.1%
2,000
+46.3%
+44.3%
CT
CO
0
CA
NY
FL
Private carrier data compiled from 2014 Annual Statements as reported to NAIC
State Fund data compiled from Annual Statements and as published in A.M. Best's Aggregates and Averages, monopolistic states excluded
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
48
Top Five States With the Lowest Five-Year
Change in Direct Written Premium
600
‐4.8%
$ Millions
500
400
‐21.6%
+4.3%
‐12.6%
300
CY 2009 DWP
+3.9%
200
CY 2014 DWP
100
0
WV
MT
KY
ME
AL
Private carrier data compiled from 2014 Annual Statements as reported to NAIC
State Fund data compiled from Annual Statements and as published in A.M. Best's Aggregates and Averages, monopolistic states excluded
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49
NCCI’s 2016 Annual Issues Symposium
Underwriting Results
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Top Five NCCI States With
Highest Combined Ratios
Accident Year 2014
State
Combined Ratio
Oregon
134
Maine
122
Maryland
113
Alaska
110
Kentucky
110
51
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
Top Five NCCI States With
Lowest Combined Ratios
Accident Year 2014
State
Combined Ratio
West Virginia
78
Texas
83
Oklahoma
83
Arkansas
85
Kansas
89
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52
NCCI’s 2016 Annual Issues Symposium
Rate Filings
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
Top Five NCCI States With Largest
Approved Voluntary Increases
2015–2016 Rate Filing Season*
State
Voluntary Change
South Carolina**
4.1%
Virginia
3.4%
Georgia
2.8%
Iowa
2.7%
Vermont
2.6%
*Filings with effective dates between October 1, 2015, and September 1, 2016
**Pending approval as of April 13, 2016
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54
Top Five NCCI States With Largest
Approved Voluntary Decreases
2015–2016 Rate Filing Season*
State
Voluntary Change
Oklahoma
–14.8%
Kansas
–11.6%
West Virginia
–11.1%
North Carolina
–10.2%
Texas
–9.9%
*Filings with effective dates between October 1, 2015, and September 1, 2016
55
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
Top Five Lowest Average Loss Cost/Rate
Changes Countrywide
0.0%
‐5.0%
‐10.0%
‐11.9%
‐15.0%
‐20.0%
‐10.4%
‐10.3%
8601
3724
‐8.8%
‐19.7%
‐25.0%
8603
8855
8803
Based on the latest approved loss costs and rates for the 50 class codes with the highest aggregate payroll countrywide
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
56
Top Five Lowest Average Loss Cost/Rate
Changes Countrywide —Class Code Descriptions
Class Code
8603—ARCHITECTURAL OR ENGINEERING FIRM—CLERICAL
8855—BANKS AND TRUST COMPANIES—ALL EMPLOYEES, SALESPERSONS, DRIVERS & CLERICAL
8601—ARCHITECTURAL OR ENGINEERING FIRM—INCLUDING SALESPERSONS & DRIVERS
3724—MACHINERY OR EQUIPMENT ERECTION OR REPAIR NOC & DRIVERS
8803—AUDITOR, ACCOUNTANT, OR COMPUTER SYSTEM DESIGNER OR PROGRAMMER—
TRAVELING
Based on the latest approved loss costs and rates for the 50 class codes with the highest aggregate payroll countrywide
57
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
Top Five Highest Average Loss Cost/Rate
Changes Countrywide
10.0%
8.0%
6.3%
6.0%
4.0%
2.0%
0.6%
0.7%
7380
7600
0.0%
‐2.0%
‐0.5%
‐0.3%
8018
7610
7405
Based on the latest approved loss costs and rates for the 50 class codes with the highest aggregate payroll countrywide
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
58
Top Five Highest Average Loss Cost/Rate
Changes Countrywide—Class Code Descriptions
Class Code
8018—STORE: WHOLESALE—NOC
7610—RADIO OR TELEVISION BROADCASTING STATION—ALL EMPLOYEES & CLERICAL, DRIVERS
7380—DRIVERS, CHAUFFEURS, MESSENGERS AND THEIR HELPERS NOC—COMMERCIAL
7600—TELECOMMUNICATIONS CO.—CABLE TV, OR SATELLITE—ALL OTHER EMPLOYEES & DRIVERS
7405—AVIATION—AIR CARRIER—SCHEDULED, COMMUTER, OR SUPPLEMENTAL—FLYING CREW
Based on the latest approved loss costs and rates for the 50 class codes with the highest aggregate payroll countrywide
59
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
Top Five States With Smallest Cumulative
Claim Frequency Decrease
Lost-Time Claims
10 Policy Year Frequency
Change
State
Georgia
–3%
Oregon
–6%
Maine
–10%
South Carolina
–11%
North Carolina
–12%
Based on data through December 31, 2014, developed to ultimate; equal to the Policy Year 2013 frequency divided by the Policy Year 2004
frequency for the 37 NCCI states with available data
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
60
Top Five States With Largest Cumulative
Claim Frequency Decrease
Lost-Time Claims
10 Policy Year Frequency
Change
State
Texas
–41%
Arkansas
–38%
Utah
–36%
Oklahoma
–36%
Louisiana
–33%
Based on data through December 31, 2014, developed to ultimate; equal to the Policy Year 2013 frequency divided by the Policy Year 2004
frequency for the 37 NCCI states with available data
61
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
Top Five NCCI States With Largest Policyholder
Dividends Percentages
Calendar Year 2014
State
Policyholder Dividend
Maine
8.5%
Iowa
2.9%
Florida 2.6%
Nebraska 1.8%
Alaska
1.3%
Calculated by NCCI from NAIC Annual Statement page 14 data
Based on private carrier data only
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
62
NCCI’s 2016 Annual Issues Symposium
Indemnity/Medical
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
NCCI States
Approved Indemnity Loss Ratio Trend
2015–2016 Rate Filing Season*
RI**
GA
IA
CT
NC
DC
LA
ME
MD
MS
OR
SC**
VT
VA
FL
NE
NV
AL
ID
IN
MO
MT
NH
NM
SD**
CO
HI
UT
KS
TN
TX
KY
OK
AK
AZ
AR
WV
1.000 0.995 0.990 0.985 0.978 0.975 0.970 0.965 0.960 0.955 0.950 0.945 0.940
*Filings with effective dates between October 1, 2015, and September 1, 2016
**Pending approval as of April 13, 2016
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
64
NCCI States
Approved Medical Loss Ratio Trend
2015–2016 Rate Filing Season*
IA
CT
IN
NH
AZ
LA
RI**
VA
AK
FL
CO
AL
HI MD
AR
ID
NE
ME
MO NM DC MS
MT OR GA NV
NC TN SC** OK
SD** VT WV UT
KS
KY
TX
1.015 1.010 1.005 1.003 1.000 0.995 0.990 0.985 0.980 0.975 0.970 0.965 0.960 0.955
*Filings with effective dates between October 1, 2015, and September 1, 2016
**Pending approval as of April 13, 2016
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
65
Top Five NCCI States With Highest Lost-Time
Indemnity Severity
Policy Year 2013
2015–2016 Rate Filing Season*
Indemnity Average Lost‐Time Claim Severity
State
District of Columbia
$42,242
Louisiana
$40,289
North Carolina
$36,213
Georgia
$36,173
South Carolina
$34,039
Source: NCCI financial data evaluated as of December 31, 2014
*Filings with effective dates between October 1, 2015, and September 1, 2016
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
66
Top Five NCCI States With Lowest Lost-Time
Indemnity Severity
Policy Year 2013
2015–2016 Rate Filing Season*
Indemnity Average Lost‐Time Claim Severity
State
Utah
$12,582
Oregon
$13,534
Indiana
$13,857
Florida
$14,953
West Virginia
$15,169
Source: NCCI financial data evaluated as of December 31, 2014
*Filings with effective dates between October 1, 2015, and September 1, 2016
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
67
Top Five NCCI States With Highest Lost-Time
Medical Severity
Policy Year 2013
2015–2016 Rate Filing Season*
Medical Average Lost‐Time Claim Severity
State
Alaska
$54,190
Virginia
$51,075
Louisiana
$49,863
Alabama
$47,716
Arizona
$45,487
Source: NCCI financial data evaluated as of December 31, 2014
*Filings with effective dates between October 1, 2015, and September 1, 2016
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
68
Top Five NCCI States With Lowest Lost-Time
Medical Severity
Policy Year 2013
2015–2016 Rate Filing Season*
Medical Average Lost‐Time Claim Severity
State
Rhode Island
$10,753
Hawaii
$13,636
Oregon
$17,936
West Virginia
$18,325
District of Columbia
$20,241
Source: NCCI financial data evaluated as of December 31, 2014
*Filings with effective dates between October 1, 2015, and September 1, 2016
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
69
Top Five NCCI States With Largest
Indemnity Percentage of Benefits
Based on the 2015–2016 Rate Filing Season*
GA
RI
DC
HI
SC
GA
State
Indemnity
Medical
Rhode Island
65%
District of Columbia
62%
Hawaii
53%
South Carolina
52%
Georgia
51%
*Filings with effective dates between October 1, 2015, and September 1, 2016
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
70
Indemnity
Percentage
Top Five NCCI States With Largest
Medical Percentage of Benefits
Based on the 2015–2016 Rate Filing Season*
AK
AZ
Medical
Percentage
State
UT
IN
NH
Indemnity
Medical
Alaska
76%
Arizona
76%
Utah
75%
Indiana
75%
New Hampshire
73%
*Filings with effective dates between October 1, 2015, and September 1, 2016
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
71
Top Five NCCI States With Biggest
Shifts in Indemnity/Medical Splits
Based on the 2014–2015* and
2015–2016** Rate Filing Seasons
Indemnity/Medical
Last Season
Indemnity/Medical
Current Season
Maine
48% / 52%
50% / 50%
Oklahoma
46% / 54%
44% / 56%
Nevada
44% / 56%
45% / 55%
Arizona
25% / 75%
24% / 76%
Georgia
50% / 50%
51% / 49%
State
*Filings with effective dates between October 1, 2014, and September 1, 2015
**Filings with effective dates between October 1, 2015, and September 1, 2016
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
72
Questions?
 Lori Lovgren, JD, CPCU
Division Executive—State Relations
lori_lovgren@ncci.com
 Ann M. Bok, FCAS, MAAA
Practice Leader and Senior Actuary
ann_bok@ncci.com
© Copyright 2016 NCCI Holdings, Inc. All Rights Reserved.
73
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