The Tennessee Trade and Insurance Commissioner has ratified a 5.6% drop in workers’ compensation costs for the voluntary market in 2022, which will result in the ninth consecutive year of rate cuts for many companies in the state.
“These cuts reflect the continuing trend towards safer workplaces and will mean that Tennessee employers may now have more money to reinvest in their businesses and employees, which will help strengthen Tennessee’s economy,” he said. Commissioner Carter Lawrence said in a bulletin released Tuesday.
It also reflects the continuing effect of changes made by the Tennessee General Assembly in 2013, which reduced some benefits and the duration of benefits for injured workers, the Insurance Department said. The decrease, recommended by the National Compensation Insurance Board, will affect new policies and renewals from March 1, 2022.
As in previous years, the reduction is greater than what some analysts had recommended. A firm of actuaries hired by the Tennessee Workers’ Compensation Advisory Council recommended a 5.3% decrease in voluntary claims costs. The report of an actuary in the insurance department suggested a reduction of 3.3%.
The NCCI filing was based on the 2018 and 2019 insurance years. Manufacturing and subcontracting classifications will see the biggest drops, 6.5% and 6.1%. The record noted that the effect of the COVID-19 pandemic remains uncertain and that pandemic data has not been included in the loss cost calculations. But the NCCI also recommended changing the disaster premium rider to include pandemics in the future.
By the Numbers Actuarial Consulting, in its report to the Advisory Board, noted that 75% of all COVID-related workers compensation claims came from healthcare workers and first responders. The dollar amount of these claims is small enough to have little effect on overall rates, but could affect individual classifications.
For class code 9040, which includes lay hospital workers, for example, the data showed a 3.1% increase in claims costs in 2020.
“If we were to assume that the pandemic will continue for the effective period at the current infection rate, an upward adjustment of the data for increased exposure and infection rate would be necessary to cover these losses,” said the By the Numbers. actuarial report, presented in October.
Lost Workers’ Compensation Benefits COVID-19 Tennessee
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