You might have heard that Texas has recently adopted National Council on Compensation Insurance (NCCI) workers compensation manuals and plans. So far, Texas has only approved the Basic and Forms Manual, Statistical Reporting Plan, and Experience Rating Plan, but are on their way to fully becoming an NCCI state.
Texas has been working to become an NCCI state since 2012. But because workers compensation has been regulated by the Texas Department of Insurance (TDI), based in Austin, TX, since 1876, transferring to NCCI brings with it a lot of changes.
With change come questions, so here are a few answers.
First, what is the NCCI?
The National Council on Compensation Insurance, based in Boca Raton, FL., is the largest provider of workers compensation data and statistics. They gather data, analyze industry trends, and provide support and recommendations to over 900 insurance companies in nearly 40 state governments.
Users of NCCI services include insurance companies, independent bureaus, self-insured organizations, regulatory authorities, legislatures, risk managers, employers, insurance agents, and more.
Why does Texas want to become an NCCI state?
If Texas becomes an NCCI state, the amount of data provided to the NCCI would dramatically increase. Once they have more data, they will be able to provide more accurate information to other NCCI states. This will profit both the NCCI and the states they serve.
In addition, Texas insurance carriers would benefit from the technical expertise, infrastructure, and support the NCCI provides. This would also free up the TDI to pursue more extensive workers compensation issues.
Insurance carriers and policyholders would both benefit from having access to more uniform statistical data, as well as functioning with more consistent rules, which are dictated by the NCCI across states.
How do the NCCI adoptions affect insurance carriers and policyholders?
The first affect is that certain workers compensation system functions transfer from the TDI to NCCI, therefore improving efficiency. This streamlines the experience for both carriers and policyholders, as well as decreases the amount of involvement from the government and TDI.
Secondly, carriers are now required to report additional data on each policy they issue to the NCCI, while the TDI required only minimal reporting. They also have to report the data in different ways.
Carriers and individual agents are now charged additional fees in order to have access to the NCCI manual, endorsements, forms, and other services they provide. However, the NCCI has agreed to apply discounts to Texas services as they make the transition.
When will Texas become an NCCI state?
That is the question on everyone’s mind. As of now, they have approved the NCCI Basic and Forms Manual, Statistical Plan, and Experience Rating Plan, but they are pushing forward to become an NCCI state. The good news is that the NCCI is developing transition plans along the way so insurance carriers and policyholders have the necessary time to adjust to the new requirements.
If you have any questions or concerns regarding the changes to workers compensation as a result of Texas becoming an NCCI state, JR Carnahan is prepared to guide you in the right direction. Connect with us here or by calling 210-587-6968.