The Kentucky Department of Insurance approved a recommendation from the National Council on Compensation Insurance to reduce loss costs by an average of 6.8% across all class codes, representing the 17th consecutive loss cost reduction for the state.
“The overall reduction demonstrates the continued reduction in the severity and frequency of claims,” the department said in a statement. “Wages and medical inflation have the potential to affect historical patterns and were considered, but are not expected to create increased premiums due to the declining claims trend.”
Severance pay is an average compensation for lost wages based on the level of disability and medical benefits and is a direct component of an employer̵7;s work skills.
While the department approved an average reduction of 6.8%, not all employers will see a reduction. For example, while the new loss rate for surface coal mining is down 2.2%, the new rate for underground coal mining is up 3.5%.
The new loss costs apply to policies starting on or after January 1, 2023.
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