The Connecticut Insurance Department approved the proposed workers’ compensation loss cost filing made by the National Council on Compensation Insurance, consisting of an overall 3.8% decrease. Also approved is an overall assigned risk rate reduction of 0.4%. These loss costs and rates will take effect Thursday, Jan. 1, 2026. For more on the CID approval, see its online Memorandum and Order.
In support of the filing, NCCI made the following key observations:
Exponential fits were reviewed to support maintaining the currently approved indemnity and medical loss ratio trends of -4% and -6%, respectively.
After adjusting to a common wage level, Connecticut lost-time claim frequency has observed a general long-term decline.
After adjusting to a common wage level, the indemnity average cost per case has been relatively flat over the long-term although with moderate year-to-year variability, while the medical average cost per case figures have been declining, on average, with significant year-to-year variability.
The primary driver of the proposed change is improved experience.
The benefit change reflects the impact of recent updates to the Connecticut medical fee schedule, as well as H.B.6863.
The proposed assigned risk rate level change includes a proposed increase to the assigned risk differential, as well as a proposed decrease to the uncollectible premium provision.
Key components
Components of the 3.8% reduction in the overall loss cost level include: changes in experience at -4.2%; development at -0.4%; trend at 0.0%; benefits at +0.9%; change in loss-based expenses at +0.2%; and offset for change in assigned risk differential at -0.2%.
Terrorism/cat loss
The terrorism voluntary loss cost remains at $0.025, and the assigned risk terrorism rate remains at $0.03. There is no change in the catastrophe charge of $0.01.
Distribution. The 3.8% reduction in the overall loss cost level is broken down by industry sector as follows: manufacturing (-5.6%); contracting (-4.9%); office and clerical (+1.3%); goods and services (-4%); and miscellaneous (-3.6%). Keep in mind that, depending on the industry sector, loss costs for an individual classification could increase or decrease in significantly different amounts. For individual voluntary loss costs and assigned risk rates, see the NCCI 2026 Filing.
Extension to three decimal places. This filing extends loss costs, rates and expected loss rates to three decimal places for all classification codes and statistical codes. This proposed change enables NCCI to recommend more precise and responsive changes by individual classification.
Maximum/minimum payroll. The maximum payroll for executive officers or members of limited liability companies increases from $3,300 to $3,400 and the minimum payroll increases from $1,650 to $1,700. The premium basis for a sole proprietor and partners increases from $86,000 to $89,200.
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 is indexed by the countrywide severity change. For 2026, the split point increases to $21,000.
Residual market. There is an increase in the Assigned Risk Loss Cost Differential from 1.550 to 1.600. There is no change in the Assigned Risk Adjustment Program (25% maximum—weighted for severity), the expense constant of $160 and the maximum minimum premium of $1,500.
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 CID and are changed periodically by individual insurers. However, these changes need not coincide with the loss costs approved Thursday, Jan. 1, 2026.
For the latest multipliers, PIA Northeast agents can access Connecticut workers’ compensation loss-cost multipliers in the PIA QuickSource.
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.
