Montana State Fund Board Declares Decrease in Rates for upcoming Policy Year

May 23, 2011

The Montana State Fund (MSF) Board of Directors adopted an overall average decrease of twenty percent (20%) for premium rates effective July 1, 2011. Rates may differ as individual class codes can vary up or down each year from the prior year rates, depending on the average losses for all the businesses in the class code.

House Bill 334 (HB334) enacted by the 2011 Montana Legislature played a significant role in the reduced workers' compensation costs.  MSF's decrease was based on the expected impacts of HB334, favorable trends for indemnity (wage loss) costs, a small decrease in claim frequency and continued but stabilized level of increases in medical costs. Most of the provisions of HB334 take effect for injuries that occur July 1, 2011 and later.

The rate changes go into effect July 1 and are the most significant seen in Montana since the early 1990s, said Laurence Hubbard, State Fund CEO and president."There was some very thoughtful discussion and comments on how to set the rates  this year," Hubbard continued. "The Montana State Fund Board considered several alternatives, including the possibility of an eighteen percent (18%) reduction, but came to a final determination of a twenty percent rate reduction as recommended by management."

Trying to get a handle on how your workers' compensation rates are set can be puzzling. Montana State Fund (MSF) and other Montana workers' compensation carriers use the National Council on Compensation Insurance (NCCI) annual loss cost filing to help formulate premium rates. NCCI, a national not-for-profit advisory group, evaluates historical information and other factors to arrive at what they believe is a realistic loss cost that insurance companies should charge to cover their policyholders' claims.  NCCI considered the impacts of legislation in their loss cost filing, which covers more than 597 individual business class codes.

Insurance companies then take into account the suggested loss costs plus a review of their customer's losses, types of jobs covered, business classifications and operating expenses to make a final determination on rates. MSF's  rate-making process is very similar to the basis used by private carriers, making it easier for you to compare rates.

Montana State Fund provides workers' compensation coverage to over 28,000 employers in the state, making it the largest workers' compensation insurance company in Montana.

Released on: May 23, 2011

Press Release Details

  • Contact: Mary Boyle – Communications & Public Relations Specialist
  • Phone: 495-5124