In the Matter of:
The National Council on Compensation Insurance, Inc.’s Workers’ Compensation Voluntary Loss Costs, Assigned Risk Rates, and Rating Values Filing, Effective January 1, 2027

November 2, 2026

MEMORANDUM AND ORDER

  1. INTRODUCTION

    On September 11, 2026, the National Council on Compensation Insurance, Inc. (“NCCI”) filed a workers’ compensation insurance application with the Connecticut Insurance Department (the “Department”) for a change in Voluntary Loss Costs and a change in Assigned Risk Rates for Workers’ Compensation Insurance pursuant to Conn. Gen. Stat. §38a-665(a) proposed to be effective January 1, 2027.

    The filing requests revisions of the current loss costs and assigned risk rates that the Department approved effective January 1, 2026. NCCI proposes an overall -4.9% change for pure premium loss costs and an overall -5.8% change for assigned risk plan rates. Changes to individual classification costs have been limited to 20% of the industry group change.

    In order to give the public an opportunity to comment on NCCI’s filing, the Department published the filing and Executive Summary on its webpage on September 29, 2026 at: WC NCCI Rate Filing and provided a thirty (30) day period for the public and interested parties to review and comment on the filing. The Department received no public comments and did not hold a public hearing.

    The following sections are a review of the NCCI filing requests; Insurance Department Staff’s recommendations; and my determination regarding approval of the filing.

  2. NCCI FILING REQUESTS

    1. NCCI’s proposed changes in Voluntary Market Loss Costs reflects the following loss cost level changes:

      Industry Group Voluntary Market Average
      Loss Cost Level Change (%)
      Manufacturing -5.5%
      Contracting -6.0%
      Office & Clerical -3.6%
      Goods & Services -4.4%
      Miscellaneous -4.9%
      Overall Change -4.9%
    2. The proposed change in Assigned Risk Market Rates reflects the following rate level changes:

      Industry Group Assigned Risk Market Average
      Rate Level Change (%)
      Manufacturing -6.4%
      Contracting -6.9%
      Office & Clerical -4.5%
      Goods & Services -5.3%
      Miscellaneous -5.8%
      Overall Change -5.8%
    3. The components of the Voluntary Market Loss Costs and Assigned Risk Market Rate changes are comprised of the following elements:

      Key Component Voluntary Market Average
      Loss Cost Level Change (%)
      Change in Experience -4.0%
      Change in Development -1.9%
      Change in Trend +0.0%
      Change in Benefits +0.4%
      Change in Loss-Based Expenses +0.5%
      Offset for Change in Assigned Risk Differential -
      Overall Voluntary Lost Cost Level Change -4.9%
        Assigned Risk Market Average Rate
      Level Change (%)
      Voluntary Loss Cost Level Change -4.9%
      Change in Assigned Risk Multiplier -0.9%
      Overall Assigned Risk Rate Level Change -5.8%
    4. The assessments due from employers for funding the cost of the Workers’ Compensation Commission are 3.18% of losses. Insurance carriers pass through these assessments to employers. For the Voluntary Market and the Assigned Risk Market, the assessment rate converted to a percentage of premium is 2.4% of standard premium. The assessment rate for “F” classifications, which provides coverage under the United States Longshore and Harbor Workers’ Compensation Act and its extensions, is increased to 5.1% of total losses, with a proposed assessment on assigned risk standard premium and voluntary market standard premium of 3.4%.
    5. The filing proposes to increase the maximum payroll for Executive Officers or Members of Limited Liability Companies from $3,400 to $3,600.
    6. The filing proposes to increase the maximum payroll for Athletic Teams from $1,700 to $1,800.
    7. NCCI estimates that the changes to the Connecticut Fee Schedule for Hospitals and Ambulatory Surgical Centers, effective April 1, 2026, will result in an impact of +0.3% on overall workers compensation system costs.
    8. NCCI estimates that the changes to the Connecticut Fee Schedule for Physician services, effective July 15, 2026, will result in a +0.1% increase on overall workers compensation system costs.
    9. The filing proposes to increase the Permissible Loss Ratio for the Assigned Risk Rate filing from 73.2% to 73.9%.
    10. The filing proposes no change to the currently approved expense constants.
    11. The filing proposes to increase the currently approved Uncollectible Premium Provision from 3.5% to 4.0%
    12. The filing proposes no change to the minimum premium multiplier.
    13. The filing proposes no change to the currently approved Terrorism voluntary loss cost. The filing proposes no change to the currently approved assigned risk Terrorism rate.
    14. The filing proposes to increase the annual payroll for Partners and Sole Proprietors from $89,200 to $92,400.
    15. The filing proposes to increase the current voluntary loss adjustment expense (LAE) provision from 22.2% to 22.8%.
    16. The filing proposes no change to the United States Longshore and Harbor Workers’ Compensation Coverage Percentage.

  3. DISCUSSION AND RECOMMENDATIONS

    1. Overall Voluntary Loss Costs and Assigned Risk Rates

      Conn. Gen. Stat. §38a-665 establishes the standards, methods and criteria for the making and use of workers’ compensation insurance rates in Connecticut. Conn. Gen. Stat. §38a-665 provides that no rates shall be excessive or inadequate, nor shall they be unfairly discriminatory. Conn. Gen. Stat. §38a-665(b) provides that consideration shall be given, to the extent possible, to: past and prospective loss experience; reasonable margin for profit and contingencies; past and prospective expenses both countrywide and those specially applicable to this state; investment income earned or realized both from unearned premium and loss reserve funds; and other relevant factors, including judgment factors.

      The Department’s staff determined that overall cost levels are decreasing for the voluntary market and the assigned risk rates. The cost levels for this filing are based on Connecticut loss experience for policy years 2023 and 2024. NCCI adjusts past losses to current conditions using adjustment methods, which make the magnitude of the change very sensitive to their assumptions. Critical assumptions include those for trend, loss development and experience period. Department staff reviewed the assumptions included in these filings for reasonableness including the changes below and concluded the proposed voluntary loss cost and assigned risk rate changes in this filing are appropriate.

    2. Assigned Risk Loss Cost Differential

      The filing proposes no change to the Assigned Risk Loss Cost Differential of 1.600

  4. ORDER

    On the basis of the foregoing recommendations and analysis by Department staff and my review of the filing, I hereby order that:

    1. NCCI’s Voluntary Loss Costs and Assigned Risk Rates are accepted as filed.
    2. The proposed Workers’ Compensation Commission industrial classification assessment fund rate will be changed to 2.4% of standard premium and “F” classification assessment fund rate will be changed to 3.4% of standard premium for voluntary market and assigned risk insurers for policies effective on or after January 1, 2027.
    3. The proposed increase to the maximum payroll for Executive Officers or Members of Limited Liability Companies from $3,400 to $3,600 is approved.
    4. The proposed increase to the maximum payroll for Athletic Teams from $1,700 to $1,800 is approved.
    5. The proposed increase to the Permissible Loss Ratio for the Assigned Risk Rate filing from 73.2% to 73.9% is approved.
    6. The proposed increase to the annual payroll for Partners and Sole Proprietors from $89,200 to $92,400 is approved.
    7. The proposed increase to the current voluntary loss adjustment expense (LAE) provision from 22.2% to 22.8% is approved.
    8. The proposed provision for the Assigned Risk Differential is unchanged at 1.60.
    9. The thirty (30) day advance filing requirement set forth in Conn. Gen. Stat. §38a-676(b) for filings received prior to January 1, 2027 be waived in order to allow for the adoption of the change in advisory pure premium loss costs effective January 1, 2027.

 

Joshua Hershman, Insurance Commissioner

Click here to view the National Council on Compensation Insurance Memorandum and Order in PDF