Protecting Employers Since 1985

October 2012

By: Anthony J. Caruso, Esq.

Good news for Illinois employers. The insurance premium rates for workers’ compensation insurance in the State of Illinois will decrease for the year 2013.

On August 7, 2012, the National Council on Compensation Insurance (NCCI) delivered a workers’ compensation advisory rate and advisory loss cost filing to the Illinois Department of Insurance. Based upon its review of the most recent available data, NCCI has proposed an overall average workers’ compensation advisory rate change of -3.8% and an advisory loss cost level change of -3.5% to become effective January 1, 2013. With the implementation of this proposed change, the advisory rate level will be 9.2% below the advisory rate level prior to the 2011 workers’ compensation reform legislation.

Here are some of the key reasons for the decrease:

  • The loss experience period used in the filing is Policy Years 2009 and 2010.
  • Claim frequency has been relatively stable since 2003. This may be attributed to safer workplaces and/or the impact of the economy on workers’ compensation.
  • Medical loss ratios have shown stability in recent years.
  • Indemnity loss ratios have shown improvements, with the decrease in average claim cost.
  • The distribution of Illinois benefit costs are 47% medical and 53% indemnity for the loss experience period.
  • The estimated impact of the revisions to the medical fee schedule effective 1/1/12 is included in this filing.

If accepted as filed, the overall average advisory rate impact at an industry group level would be as follows:

Industry Group1-1-2013 Filing
Office and Clerical-4.9%
Goods and Services-2.1%

Please note that the NCCI rate reduction is merely advisory as to each individual insurance company issuing workers’ compensation insurance coverage in the State of Illinois. Generally, most insurance companies will charge at or near the advisory rate by the NCCI. The exception is for employers placed in the assigned risk pool who pay a substantially higher rate due to various factors (i.e. high loss experience, high risk industry, or no prior loss experience).

If you have any questions about this topic or any other questions related to workers’ compensation, please call attorney Anthony J. Caruso of Wessels Sherman’s St. Charles, Illinois office at (630) 377-1554 or email

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