LITTLE ROCK– Arkansas Insurance Commissioner Alan McClain said in a press release Thursday that Arkansas businesses could see another rate decrease in workers’ compensation insurance in 2022.
The Arkansas Insurance Department (AID) approved an average overall average workers compensation voluntary market loss cost level decrease of 10.8% and a drop of 11% for the assigned risk market.
The new rates—for policies renewing on or after July 1, 2022—represent a change from last year, which saw a 1.1% decline in the voluntary market and a 1.6% cut in the assigned risk market.
Employers purchase workers’ compensation through one of two markets, the voluntary market and the assigned risk market. In the voluntary market — the open competitive market — loss costs will decrease by an average of 10.8%, which is the primary component of workers’ compensation rates. Approximately 91% of Arkansas employers receive voluntary market coverage, accoring to the AID.
In the assigned risk market — the market for employers unable to obtain coverage in the voluntary market — rates could decrease by an average of 11%.
The department accepted recommendations from the National Council on Compensation Insurance (NCCI), which analyzes and recommends rate adjustments in more than forty states.
NCCI based their recommendations on premium and loss experience for policy years 2017 through 2019.