Virginia has approved a 12.0% loss cost decrease in the workers’ compensation voluntary market along with rate decreases in the assigned risk market, effective April 1, 2025.
The State Corporation Commission (SCC) approved the proposed voluntary loss costs, along with a change in the assigned risk factor, recommended by the National Council on Compensation Insurance (NCCI) in July.
The Bureau of Insurance supported the loss costs filing but opposed the -0.5% profit and contingency factor used by NCCI to calculate the assigned risk rate decreases, recommending instead a -1.5% factor. NCCI did not object to the change.
As a result of the SCC’s review, the voluntary market average decreases by classification starting April 1, 2025, will be:
-12% industrial
-11.1% surface coal mine
-11.6% underground coal mine
-4.9% Federal
For the assigned risk market, the average decreases by classification will be:
-16.8% industrial
-14.3 % surface coal mine
-14.9 % underground coal mine
-10.1% Federal
The SCC noted the concerns of the state Insurance Bureau and Consumer Counsel with the methodology NCCI uses to arrive at the profit and contingency factor for calculating assigned risk rates. The SCC directed the bureau’s working group to come to a consensus with NCCI on appropriate methods for future filings.
The NCCI filing was based on premium and loss experience as of year-end 2023 from policy years 2021 and 2022. This data showed that experience in recent years has improved, and the level observed in policy year 2022 is consistent with that observed in policy year 2021.
The NCCI reported that Virginia’s lost-time claims have generally declined over the most recent eight years and there has been continued improvement in the medical trend.
Independent Insurance Agents of Virginia