Workers’ Compensation Rate Hearing Update #1

Workers’ Compensation Rate Hearing Update #1

The long anticipated administrative law court hearing on the National Council of Compensation Insurance’s (NCCI) proposed 32.9% increase in workers’ comp loss cost rates began today. In July of last year, NCCI filed its rate hike request with the S.C. Department of Insurance (DOI). The process is now before Judge Marvin F. Kittrell.

Below are the highlights of today’s testimony:

–The DOI denied the NCCI’s 32.9% increase request last September saying that the hike would lead to excessively high workers’ comp rates. Today, the attorney for the DOI, Mr. Jeffrey Jacobs, stated that the DOI has changed its opinion and that the agency now believes that the 32.9% increase is not sufficient. That’s correct. Governor Mark Sanford’s DOI is not only supporting a 32.9% hike in workers’ comp loss cost rates in this hearing, it believes that the increase should be higher, as much as 44%!!!

–The DOI also successfully motioned that pre-filed testimony, critical of DOI for failure to verify Second Injury Fund data supplied by insurance carriers, be excluded from the hearing.

–When NCCI first proposed its 32.9% increase last July, two business organizations immediately filed to intervene in any public hearing—the S.C. Chamber of Commerce and The SC Small Business Chamber of Commerce. Both groups expressed alarm at the size of the increase.

But while the Small Business Chamber intervened in order to fight the proposed increase, the attorney for the S.C. Chamber said today that his organization intervened only as a quality check. The big chamber has no opinion on the rate hike request and simply wants any increase to be fair and adequate.

The S.C. Chamber’s attorney subsequently declined to question any of NCCI’s witnesses except once to pose an NCCI-friendly question to discredit one piece of data that might argue against such a high rate increase.

–The attorneys for the Small Business Chamber, Mr. Bill Smith and Mr. Kevin Holmes, argued that due to the quality of the NCCI data and the methodology used, no rate increase or only a minor one was justified.

The hearing continues Tuesday morning at 9:00 AM.