FAQ's on the 2011 Montana Workers Compensation Reforms

? I keep hearing about price changes coming from the NCCI.  Just what is NCCI?

NCCI stands for the National Council on Compensation Insurance, Inc.  NCCI analyzes industry trends, prepares workers compensation insurance rate recommendations, determines the cost of proposed legislation, and provides a variety of services and tools to maintain a healthy workers compensation system. 

? I've heard about price reductions from 20% to 40%.  What's the deal?  Just what can I expect?

There are actually two NCCI rate recommendations coming on line this July.  Earlier in the year, NCCI recommended a rate decrease of just over 5% for Montana.  Then, after the 2011 Legislature met and passed workers compensation reforms, they issued another rate advisory of -22.4%.  Each carrier will apply the advisory rates to their respective pricing formula.

? Is this an across the board decrease for every business?

No, most of the rate decrease is specific to an insured's particular class of business.  The average is      -22.4%, but, depending on what you do, can be as high as -23 % to as low as -1.4%. 

? I've been told that I can cancel and rewrite my policy and get even a better deal on price.  Is this correct?

Not really, most of the rate change will be applied to New, Renewal and all other outstanding policies.  This means, come 7/1/11, if your current carrier accepts the rate changes, you will be getting a pro rata rate deduction without having to cancel and rewrite.  Also, it's important to know that a mid term change in a workers compensation policy can potentially negatively impact your experience modification factor.  Make sure you get competent advice before changing your renewal date.

? You keep saying "if my carrier adopts the recommended pricing changes", doesn't everyone have to lower their rates?

No, the NCCI issued Advisory Loss Cost for Montana.  It is up to each particular carrier to decide if it will adopt the Advisory rate change. 

? How will I know if my carrier is taking the rate change?

Your agent should be able to tell you, but the best way is to compare the bottom line rates you're quoted on 7/1/2011 with the rates you were quoted for last year.

Payne Financial Group is available to answer any questions you may have.

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