Commissioner of Securities and Insurance Monica Lindeen approved a 22.4 percent reduction in workers’ compensation insurance loss costs on Monday, which will translate to lower premiums for employers. The dramatically lower loss costs, which are the costs insurers pay for claims, come as a result of bipartisan legislation signed by the governor last month.
“When I ran my small business, I saw firsthand what a difference insurance costs make on the bottom line,” said Lindeen. “Now, Montana’s workers’ compensation premiums are the highest in the nation. Cutting loss costs by 22.4 percent will lower premiums and could make the difference for small businesses looking to hire new workers and expand.”
Montana law requires the Commissioner to review workers’ compensation insurance loss costs, filed by the state’s workers’ compensation advisory organization, the National Council on Compensation Insurance (NCCI). Private workers’ compensation insurance providers are required to adopt loss costs filed by NCCI, which will result in lower premiums. The state’s largest workers’ compensation insurer, the State Fund, is exempt from regulation by the Commissioner of Securities and Insurance, so it is not clear how the State Fund will adjust its rates.
“As private insurers lower their premiums, I am confident the free market will work and the State Fund will follow,” said Lindeen. “I fully expect the State Fund to match its private competitors dollar for dollar.”