The Commissioner of Insurance will consider staff's recommendation to reduce the workers' compensation classification relativities by 15 percent. Staff recommends that the revised relativities be required for all policies with an effective date on or after July 1, 2019, unless the insurer files an alternative rate basis.
To produce the recommendation:
- Staff used the most recent experience available to develop a revenue neutral set of relativities in relation to the current relativities.
- Staff limited the changes to any one class to plus or minus 25 percent to minimize the rate impact.
- Staff then multiplied the revenue neutral set of relativities by a factor of 0.85 to incorporate the proposed overall 15 percent decrease.
The Texas workers' compensation market continues to be profitable, and the continued improvement in loss experience suggests the need for a decrease in the relativities. Reducing the overall level of the relativities by 15 percent from the current level would bring the relativities to an overall decrease of about 44 percent since 2011. This would be close to the overall decrease in NCCI's loss costs for the same period. NCCI started filing loss costs in Texas in 2011.
Insurers must choose one of three rate bases:
- Relativities established by TDI.
- The insurer's own independent company-specific relativities.
- NCCI loss costs.
The Commissioner has jurisdiction over this matter under Insurance Code Section 2053.051. The Commissioner will consider comments on the recommendation before issuing an order on the relativities.
TDI requests written comments on or before 5:00 p.m., central time, on March 4, 2019. You also may request a hearing by 5:00 p.m., central time, on February 15, 2019. Send comments or hearing requests to ChiefClerk@tdi.texas.gov or:
Office of the Chief Clerk, Mail Code 113-2A
Texas Department of Insurance
P.O. Box 149104
Austin, Texas 78714-9104
Issued in Austin, Texas, on January 29, 2019.
Norma Garcia, General Counsel
Texas Department of Insurance