NCCI's IWCC Presentation

On Wednesday, November 30, NCCI (National Council on Compensation Insurance, Inc) presented an overview of both the Illinois and national workers' compensation markets for the IWCC Advisory Board and Medical Fee Advisory Board. 

This presentation, by Terri Robinson and Karen Ayres, was a slightly condensed version of the 2011 Illinois State Advisory Forum report NCCI released in October at its Rosemont, IL meeting. 

During Wednesday's meeting, many of the questions and comments from the audience revolved around NCCI's recommended -8.8% advisory premium rate adjustment on 9/1/2011.  HB 1698/Public Act 097-0018 required NCCI to file revised rates and loss costs by September 1, and the Illinois Department of Insurance approved that rate reduction. 

According to the presentation, while NCCI stated that many of HB 1698's modifications to the workers' comp system should lower system costs, it could only quantify a few of those changes with the information available and the required deadline to recommend a new premium rate.  The actuaries at NCCI calculated that the following reforms would reduce the overall workers' compensation costs for Illinois by 8.8%:

• the 30% fee schedule reduction                     -7.4%
• the changes to the wage differential benefits   -0.8%
• the changes to PPD carpal tunnel benefits       -0.6%  

NCCI has also filed its annual rate update, a 3.5% increase, with the IDOI for 1/1/2012.  NCCI's 1/1/2012 rate updates for neighboring states: 

• Indiana:  +2.6%
• Iowa:  +4.4%
• Missouri:  -3.0%

While the Illinois rate increase is 3.5%, that number is misleading when compared to its neighboring states.  Unlike those states, the Illinois rate increase is calculated off the 9/1/2011 rates, rather than the 1/1/2011 rates. 

Taking into account the -8.8% reduction to the rates on 9/1/2011, the recommended 3.5% increase to the Illinois rates equate to a rate reduction of -5.3% from the 1/1/2011 rates for Illinois.

The full NCCI Illinois State Advisory Forum report is available on the NCCI website.