Nevada Insurance Commissioner Alice Molasky-Arman said Nevada's worker compensation insurance rates may defy the national trend and decrease next year.
The National Council on Compensation Insurance has recommended an average 16.4 percent reduction in worker comp insurance "loss costs" for Nevada effective in January. If the insurance division adopts the recommendations, it will enable Nevada providers to lower premium rates next year.
That is in sharp contrast to California where premiums have doubled and even tripled this past year as dozens of insurers either declared insolvency or left the state.
Arman said the council also wants to scrap the simplified asssigned risk program, replacing its maximum surcharge of 49 percent with a maximum 25 percent surcharge. That was proposed after the insurance division raised concerns the existing assigned risk program unfairly hurt smaller businesses with one or two claims.
Council members calculate the loss costs of insurance companies providing workers' compensation policies in Nevada. Those numbers, after review by the insurance division, are used to determine premiums employers must pay for coverage.
Cliff King, of the insurance division, said in an interview earlier this month the agency doesn't allow carriers to deviate from those numbers, which prevents companies from selling workers' compensation insurance for less than it costs them. Some California companies, which are less regulated than in Nevada, have done just that, relying on interest earnings from premium money to make a profit. When interest and investment earnings collapsed because of the nation's economic slump last year, many of those companies went in the red.
The recommendation from the council that rates be lowered instead of increased in Nevada next year proves Nevada's workers' compensation providers aren't in that situation. King and Doug Dirks of Employers Insurance Co. of Nevada said earlier this month Nevada's regulatory system helps make sure the industry is much more stable and solvent than California's.
The report is available for public review and comment. The insurance division will make a decision in a few weeks on whether to adopt the recommendations.
