Possibility of discounts eases pain of workers’ comp premium hikes

Tuesday, May 16, 2000 | 11:25 a.m.

CARSON CITY -- More than 44,000 Nevada employers will see their premiums change for workers' compensation policies under a plan approved Monday by state Insurance Commissioner Alice Molasky-Arman.

Molasky-Arman accepted the recommendations of the National Council of Compensation Insurance for an average 6.3 percent increase in premiums.

Cliff King, supervisor of property and casualty in the insurance division, said the commissioner did not receive a single protest from employers.

Employers will be notified of their rate changes upon policy renewals. King said the lack of protests is probably due to the fact that insurance companies will now be able to offer 15 percent rate reductions to their customers.

Until July, all insurance companies that write workers' compensation policies must charge the same rates. But now there will be competition with the option to offer 15 percent reductions. Next year the companies will enjoy free competition on rates.

The new rates for employers will vary, depending on their on-the-job safety record. Those with high injury incidents will face higher rates.

Rates were increased in January by 6.4 percent due to increases in benefits approved by the 1999 Legislature.

The national council, which advises Molasky-Arman, said at a public hearing earlier this year that 83 percent of the big employers in Nevada had a better than average safety record. This means they enjoyed an experience rating entitling them to lower premiums.

As a result, the council said small employers, who do not qualify for an experience rating, were subsidizing the major companies when it came to paying premiums.

Molasky-Arman accepted the recommendation of the council to adjust the standards so that 65 percent will fall into this category and receive low rates. The goal of the council is to have 50 percent of the employers in the high-safety category.

Molasky-Arman said the adjustments "promote stability while bringing the plan closer to balance."

She also ordered the premium transition plan, approved in December 1998, be continued. That means rates for an employer cannot go up or down more than 20 percent.