DORA Orders 9.7% Decrease in WC Loss Costs

Colorado employers will be looking forward to additional financial relief next year by paying lower premiums for workers' compensation insurance due to the announcement that a significant component of workers' compensation premiums, known as loss costs, will drop 9.7 percent..

"Colorado employers could see as much as $84 million in reduced premiums for workers' compensation insurance, if all insurers implemented the revised loss costs with no further adjustments,” said Colorado Insurance Commissioner Marcy Morrison in a statement.

It is expected that the ultimate savings to consumers will be significant, but smaller than the maximum projection because rate filings will be made by individual insurers before the loss cost reduction goes into effect on Jan. 1. However, many employers will realize a savings in their workers' compensation premiums compared to last year.

“In this tough economy, it’s vital that state government is a strong and effective partner for Colorado businesses,” said Gov. Ritter. “This nearly 10 percent reduction in the loss costs factor in setting workers’ comp insurance premiums is extremely good news for businesses across the state. Our economy is doing better here than in many other states, and this will only help.”
The loss cost reduction is based on a continuing decrease in the number of claims filed in 2008.
“Workers compensation insurance loss costs have declined more than 50 percent since 2000, and this year’s decrease represents the eighth decrease in nine years,” Commissioner Morrison said. “This continuing trend indicates that workplaces are much safer than they have been in the past, and that employees are performing their duties in safer manners. Safety programs introduced by employers and insurance companies over the past several years are improving the Colorado workers compensation claims data, and that improvement continues to drive loss costs downward.”

For more information, click here (PDF link).