The rates employers pay for workers’ compensation insurance are set to drop in North Carolina next year for the first time since 2004.
The final rates have yet to be established, but through seeking an average decrease of 4.4 percent, the N.C. Rate Bureau has ensured that rates will decrease in 2009.
The request was filed on August 29 by the Rate Bureau, which represents over 150 insurance companies offering workers' comp policies in N.C. The N.C. Department of Insurance could ask for an even lower rate.
N.C. Chamber spokeswoman Sherry Melton said that she believes a rate reduction is great due to the importance of workers’ compensation costs in doing business in N.C. and because it reflects efforts to improve safety in the workplace.
According to the Insurance Department, in 2007, employers in N.C. paid $1.5 billion in workers’ comp premiums. Companies that are self-insured are not included in those numbers.
According to Rate Bureau general manager Ray Evans, there were several factors driving the lower rate request.
- Recent rate increases. In 2005, rates increased 9.3 percent, in 2006 they increased 7.3 percent and in 2007 they increased 1.6 percent.
- Claims costs have been lower than expected in recent years as opposed to past years in which they were higher than expected.
- Lower frequency of workplace accidents. According to Evans, 2006 saw a two percent decrease.
The approved rate would take effect April 1.