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NCCI 2020 WC loss cost decrease of 9.5% approved

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 9.5% decrease. In addition, a decrease of 10.3% of the overall assigned risk rates was approved as filed. These loss costs and rates will take effect Wednesday, Jan. 1, 2020.

The NCCI made the following observations that impact loss costs and rates in the state:

  • The financial data experience period evaluated as of Dec. 31, 2018, shows notable improvement when compared with the experience period evaluated as of Dec. 31, 2017, on which the previous filing was based.
  • New Hampshire’s claim frequency increased slightly in the latest year.
  • After adjusting to a common wage level, indemnity and medical average cost per case figures remain relatively flat.

Rating components

Components of the -14% loss cost reduction include changes in: 1. experience at -9.2%; 2. trend at -1.4%; 3. benefits at 0%; and 4. loss-based expenses at +1.0%. Also, the overall voluntary loss cost change can be broken down by industry sector as follows: manufacturing (-9.8%); contracting (-10.0%); office and clerical (-10.2%); goods and services (-10.8%); and miscellaneous (-5.1%). Keep in mind that the changes in loss costs and rates for individual classifications may vary significantly. For more information on these individual classifications, PIANH members can access  QS28025 in the PIA QuickSource library.


The terrorism loss cost remains at 0.005 and the terrorism assigned risk rate remains at 0.01. The catastrophe (other than Certified Acts of Terrorism) loss cost and assigned risk rate also remain at 0.01.

Maximum/minimum payroll

You will notice that the maximum payroll for executive officers and limited liability company members increased from $4,100 to $4,300, but the minimum payroll remains at $550. The maximum payroll for executive officers of an unincorporated association increases from $2,100 to $2,200, but the minimum payroll remains at $275. Also, the premium basis for a sole proprietor and partners increases from $27,400 to $28,200.

Split point

The third and final year for the split point transition period for experience rating was in 2015. In each subsequent loss cost filing, the split point will be indexed by the countrywide severity change. For 2020, the split point increases from $17,000 to $17,500.

Loss cost multipliers

In order to convert voluntary lost 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 Wednesday, Jan. 1, 2020. The current list of insurer LCMs is located here.

Assigned risk plan

The 2020 assigned risk loss cost multiplier decreases to 1.545 from the 2019 multiplier of 1.558. Insurers having an approved LCM higher than the plan must advise policyholders that a lower premium is available in the Plan. Market share in the plan has increased to 10.7% in Plan Year 2017.

The expense constant remains at $160 and the maximum minimum premium of $1,000 does not change. Also, the flat differential, which reflects the general experience of risks in this market, remains at 25%.