N.D. Workforce Safety Approves Slight Premium Increase for WC
North Dakota’s Workforce Safety & Insurance’s Board of Directors approved a slight premium increase for workers’ compensation coverage.
The premium increase of 1.1 percent takes effect on July 1 and marks the first time in nine years that premiums have been increased. Overall rates actually decreased 1.1 percent on average but because of the effects in the increase in the state’s average weekly wage, average premiums will increase 1.1 percent. North Dakota employers will still reportedly be paying the lowest premiums in the country, according to a recently published study conducted by the Oregon Department of Consumer and Business Services on state by state premium comparisons.
Workforce Safety & Insurance (WSI) will reduce the rates for 34 of the 141 rate classes. No class will see a rate increase.
At a pubic hearing earlier this month WSI proposed increasing premiums overall by 5.8 percent. “But based upon investment news received this week the Board of Directors believes this is a fiscally responsible alternative,” said Brent Edison executive director and CEO of Workforce Safety & Insurance.
“We are permitting those classes that were slated for a rate decrease based on their loss history to continue to receive it under the new proposal,” said Edison. “And we will re-double our safety efforts on those 96 classes that were slated for a rate increase under the original proposal.”
The workers’ compensation climate in North Dakota has reportedly been quite favorable in recent years. Statewide premiums peaked in 1996 at $133 million. This past year, statewide premiums were $93 million, a 30 percent reduction since 1996 and approximately the same statewide premium level that existed in 1993.
“Given the overall economic slowdown, and the tough insurance market, the fact that Workforce Safety & Insurance was able to hold the line on a premium increase of just 1.1 percent is even more remarkable,” continued Edison.
In fact in its April 2003 report the national publication, On Workers’
Compensation, reported that premium increases on average across the country were between 10 and 30 percent in the 4th quarter of 2002. With nearly half of comp insurers reporting premium increases of 20 to 30 percent.
Nationwide, the average cost of workers’ compensation insurance has risen 50 percent in the last three years, according to Robert Hartwig, the chief economist at the Insurance Information Institute.
By comparison, North Dakota’s premiums have dropped 5.4 percent in three years, taking into account the 1.1 percent increase announced today.
The slight increase in premiums also reportedly reflects well on Workforce Safety & Insurance’s commitment, as well as employers’ commitment, to safety. For the fourth straight year WSI wage-loss claims remain under one worker per hundred. By the end of 2002 there were over 2,500 employers (representing over half of the state’s work force) utilizing an approved
safety plan.