The New Hampshire Insurance Department approved the original workers’ compensation voluntary loss cost filing made by the National Council on Compensation Insurance—consisting of an overall 5.6% decrease. These loss costs will take effect Wednesday, Jan. 1, 2025. For more on the NHID approval, see the online bulletin.
Key components
Components of the 5.6% reduction in the overall loss cost level include changes in experience, trend and benefits at -6%; and loss-based expenses at +0.4%.
Distribution. The -5.6% reduction in the overall loss cost level is broken down by industry sector as follows: manufacturing (-7.2%); contracting (-6.4%); office and clerical (-8.1%); goods and services (-4.6%); and miscellaneous (-3.8%). Keep in mind that, depending on the industry sector, loss costs for an individual classification could increase or decrease in significantly different amounts.
Terrorism/catastrophe
The terrorism loss cost remains at 0.005 and the catastrophe (other than Certified Acts of Terrorism) loss cost also remains at 0.01.
Maximum/minimum payroll
You will notice that the maximum payroll for executive officers and limited liability company members increases from $5,500 to $5,700, and the minimum payroll remains at $700. The maximum payroll for executive officers of an unincorporated association increases from $2,800 to $2,900, and the minimum payroll remains at $350. Also, the premium basis for a sole proprietor and partners increases from $36,000 to $37,100.
Split point
2015 was the third and final year of the split point transition period for experience rating. In each subsequent loss cost filing, the split point will be indexed by the countrywide severity change. For 2025, the split point remains at $22,500.
Loss cost multipliers
To convert voluntary loss costs to rates, the insurer’s loss cost multiplier must be applied. These LCMs are filed with the NHID and are changed periodically by individual insurers. However, these changes need not coincide with the loss costs approved Jan. 1, 2025. The current list of insurer LCMs is located here.
Dan Corbin, CPCU, CIC, LUTC
Dan Corbin joined the PIA team in 1992 and is the association’s director of research. His insurance background spans 45 years, with varied experience as agency owner, commercial service representative, producer, personal-lines manager and insurance specialist for a mortgage lender. Each year, he responds to approximately 800 technical inquiries from members. Dan is a member of the Chartered Property Casualty Underwriter Society and the Society of Certified Insurance Counselors. On Jan. 1, 2021, he became a contracted provider of membership services.
