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Relief on workers' comp

Workers' compensation insurance rates paid by N.C. employers are poised to decline next year for the first time since 2003.

Final rates haven't yet been established, but the N.C. Rate Bureau has ensured that rates will dip next year by seeking an average decrease of 4.4 percent.

The Rate Bureau, which represents more than 150 insurance companies that offer workers' compensation policies in the state, filed its request Aug. 29. The state Department of Insurance could seek an even lower rate.

“We're happy to see they filed for a decrease,” said Insurance Department spokeswoman Kristin Milam. “We're reviewing the file to see if a further decrease is warranted.”

Workers' comp premiums are paid by employers, who are struggling with the rising costs of many items, including energy and insurance.

“I think a rate reduction is a great thing, because workers' compensation costs are an important part of doing business in this state,” said N.C. Chamber spokeswoman Sherry Melton. She added that lower rates reflect employers' efforts to improve workplace safety.

Last year, the state's employers paid $1.5 billion in workers' comp premiums, according to the Insurance Department. Those numbers don't include companies that are self-insured.

Ray Evans, general manager of the Rate Bureau, said several factors drove the request for lower rates:



Healthy rate increases in recent years. Rates rose 9.3 percent in 2005, 7.3 percent in 2006 and 1.6 percent last year.



After years of underestimating the overall costs of claims, in recent years “the ultimate cost of claims has been a little less than what we expected,” Evans said. Claims costs, which include both replacing lost wages and medical and rehabilitation costs, can last a lifetime – even continuing past retirement age. Consequently, estimating the cost of claims is a constantly moving target.



The frequency of accidents in the workplace has been falling. Accidents declined by 2 percent in 2006, Evans said.

The approved rate would take effect April 1.

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