2013 NCCI Primary/Excess Split Point Rating Makes Big Changes to Workers Comensation

Posted by on Aug 29, 2012 in Business Insurance


The NCCI, the National Council on Compensation Insurance, recently released their plan to change the Primary/Excess Split Point Rating System for Workers Compensation Insurance in the United States. This new system is slated to take effect January 2013 in most states, and is planned to be fully implemented over the next 3 years. Some states such as Massachusetts have an independent rating bureau that most likely will be implementing a similar system. This new system will change the way Experience Modifications Factors are calculated for every Workers Compensation Policy.


How It Works

In the process of experience rating, each loss is divided into a primary and excess portion, depending the the amount of the loss. Currently, the split point is $5,000. So for any one claim, the amount under $5,000 would be considered primary, and the remainder over $5,000 would be considered the excess portion. So using the current rates, a $20,000 loss would have a $5,000 primary loss, and $15,000 in excess loss. Any loss under the $5,000 split point would only be considered primary.


All primary losses are given full weight in the experience rating process, and excess losses are given a reduced factor. The rational for this type of rating is as follows… When an organization has a large primary loss history, it is usually the result of many small claims indicating a larger frequency of losses, which signifies an increased risk of future losses. One severe excess loss is not nessasrly equivalent to the same risk level for future losses, as the frequency of primairy losses.


For example, if a company has 1 large loss due to a non-frequent injury or accident, this will be given less weight dollar for dollar over the split point rating figure than a company that had 6 consecutive smaller losses. The frequency of the 6 losses is considered more of a risk factor for a major or castistrofic loss down the road. So the primary loss figures reflects the frequesncy of losses, and the excess loss figures reflects severity.


The New Plan would increase this split point gradually over 3 years from $5,000 to 15,000. Year 1 would be the largest increase to $10,000, year 2 would increase to $13.500, then year three would take it to the full $15,000.


Why Is This Change Being Made?

This change is being made to bring the rating system up to date with the crrent claim environment, to account for claims inflation. The last change that was made to this system was two decades ago. Since this change, the average cost per Workers Compensation insurance claim has tripled. So this has reduced the effectiveness of this type of split point rating. The system has move more toward an all-risk average, instead of reflecting the insureds actual claims experience.


So Will the Price of My Policy Go Up or Down?

That depends on your prior loss history. If you have small losses under the current $5,000 limit you may see a reduction in your experience rating. If you have losses that fall between the current $5,000 and the proposed $15,000 eventual limit, or above, you may see an increase. It is difficult to say without exact underwriting and rating figures.



If you have any questions regarding your current Workers Compensation Policy, or if you would like us to take a look at your insurance program, please visit our website www.downeyinsurance.com for details.

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I Am Vermont Strong License Plate- Released and Approved for Use

Posted by on Jan 6, 2012 in Business Insurance, Downey Insurance, Farm Insurance, Insurance

Image courtesy of I Am Vermont Strong Faceebook Page

The state of Vermont and the Vermont Department of Motor Vehicles has approved the use of the “I Am Vermont Strong” license plate for Vermonters. The plate may be displayed over your current Vermont registration on the front bumper of your vehicle through June 30th 2014.

You may pre-order your one of 10,000 license plates for $25, for shipment on 2/1/2012. More license plates may be created if there is a strong demand, but pre-ordering will get you on the list for the first edition.

The idea for the plates arose the of the “I Am Vermont Strong” movement that was started by Lyz Tomsuden and Eric Mallete of Rutland, VT. Originally “I am Vermont Strong” started as a Facebook photo that went viral. Vermonters loved the message so much that they started requesting t-shirts by the hundreds. So far they have sold over 4,500 t-shirts to Vermonters and Vermont supporters.

“I am Vermont Strong” will be donating $18 to the Vermont Disaster Relief Fund, and $2 to the Vermont Food bank for every license plate sold. Irene cause so much damage to the state of Vermont and donations are starting to decline, new sources of revenue for the relief funds can only help our cause. The resiliency and resourcefulness of our people never cease to amaze me as we travel on this journey to recovery.

To Pre-Order Your “I am Vermont Strong” plate you may do so through Vermont Life, and to read more about the “I am Vermont Strong” movement check out their website http://vtstrong.vermont.gov/ or Facebook Page.

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It’s Moving Day! Downey Insurance is Back on Flat Street in Brattleboro VT

Posted by on Dec 5, 2011 in Business Insurance, Downey Insurance, Homeowners Insurance, Insurance

After 3 months at our temporary location at 57 Elliot Street  Brattleboro, VT we are finally back in our 80 Flat Street Location that was flooded out by hurricane Irene.  What a crazy ride it has been, but what doesn’t kill us makes us stronger.  Overall Downey Insurance Group is lucky, all we lost were material possessions.  Thanks to technology and the ability to work “in the cloud” we did not lose any of our policy data and we were able to help clients with their own claims during and after the disaster.  We could work from the top of Mt. Wantastiquet if we wanted to, but there is nothing like you own familiar surroundings to make you feel at home.  With the addition of new office furniture and carpet we think our office is looking pretty snazzy.  Thank you to Conte Office Interiors for helping us with our new office furniture!


Looking around Flat Street it is hard to envision what it looked like during the flood.  We found this video on You Tube, we don’t know this guy but I would like to thank him for this crazy footage of Flat Street during the flood.  Check out this video of our office building being ravaged by the flood waters…

To get the whole story read our first Flood Blog post.

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Downey Insurance Group Is Balancing Its Own Disaster Management Crisis as They Maintain Continuity of Service for Their Clients

Posted by on Aug 29, 2011 in Business Insurance, Downey Insurance, Insurance

Downey Insurance Group is fully functional even as our Brattleboro, VT office is currently under water with the many other businesses near Main Street in Brattleboro, Vermont.  The area is experiencing devastation from flooding conditions that have not been seen in nearly a century.   Many of the residents in Vermont were not expecting this magnitude of flooding from hurricane Irene. Rivers and streams flooded quickly forcing people to evacuate without much notice and without many options.   Many of these flooded homes and businesses are without flood insurance which will make recovery difficult for many.   FEMA will be assessing the damage and should be accepting request for Disaster Assistance shortly.


Unlike some of the businesses in the area, it is crucial for Downey Insurance Group to maintain complete functionally during this crisis due to the nature of our business. We are responsible for filing claims for our clients during this difficult time.  We are simultaneously working on our own claim for Downey’s Brattleboro office that is currently still unreachable due to flooding conditions.  We have re-routed our phone lines to our only fully operational location in Keene, NH where we currently have power, internet, and phone.   Our Marlborough, MA office is semi-functional  with power and phone, but no internet.  Thankfully as part of our Emergency Management Plan we have the capacity to handle this type of  situation with lists of phone and fax numbers for our insurance companies and paper claims forms.


Charlie Downey sprang into action this morning by driving up to Brattleboro, VT through the devastation zone to reach out to the community to find a temporary office space to house our Brattleboro, VT during the cleanup.  The rest of our team at Downey Insurance is working feverishly to file claims for our clients and to help the people during their time of need.  The teamwork and quick action of the Downey Insurance Group family have made this all possible.


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Downey Insurance is marching in the 10th Annual Strolling of the Heifers Parade June 4th, 2011

Posted by on May 5, 2011 in Business Insurance, Downey Insurance, Farm Insurance, Insurance

Downey Insurance Group is excited to be marching in the 10th Annual Strolling of the Heifers parade in Brattleboro, VT again this year.  This will be our 4th year sponsoring the event and participating in the parade.  We think it is such a great way to show our support for our local farm clients that are so important to us and to the community.  We insure most of our farm clients in the Monadnock region with Co-Op Insurance Company of Vermont which is co-sponsoring us to march in the parade.

This year the prade is being held on Saterday June 4th, 2011.  It will run down the Main Street of Brattleobro, VT then end at The Living Green Expo on Brattleobro common that will include farmers, food-producers and other sustainability vendors.  There will alos be food vendors and a small carnival for children.  The parade will include around 100 heifer calves adorned with flowers, then other livestock and local community organizations will follow.  You never know what the parade will bring with many floats and performances expected.  My alltime favorite would have to be the “Plastic Bag Monster” of 2008.

If you were at the parade last year you will remember Charlie Downey’s son David with the oversized hula-hoop.  He was a crowed pleaser for sure,  everyone was amazed that he could keep that large hoop up for so long!!

This years Strolling of the Heifers theme is “It Takes a Community to Support our Farmers.”  Downey Insurance Group is so happy to be part of that community, by protecting our local farms with farm insurance products.   When the unthinkable happens we are there to help make it right.  Without insurance most frams would not be able to continue their operations after a large loss.

This year preceeding the Parade on Saterday Brattleboro is hosting the first Slow Living Summit June 1st – 3rd.  It’s focus will be on growing the sustainablity movent .  Many speakers and workshops are planned with industry leaders.  This summit will definaly get things moving in on

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Start of the Maple Season for New Hampshire kicks off in Keene, NH

Posted by on Mar 14, 2011 in Business Insurance, Downey Insurance, Farm Insurance, Insurance

KEENE, N.H.—Maple season is under way in New Hampshire, and Gov. John Lynch is getting in on the action.

Joined by his wife and local school children, Lynch will tap a tree in Keene on Monday to officially mark the start of the season.

In the last few years, New Hampshire has produced between 90,000-100,000 gallons of syrup a year, which adds up to nearly $5 million in annual revenue through the sale of maple products  – Article from Boston.com

Downey Insurance Group in Keene, NH and Brattleboro, VT proudly insures maple farms in New England.  Also don’t forget  Co-Op Insurance has just announced a new Group Discount Program for the New Hampshire Maple Producers AssociationThis discount can be applied your current Co-Op policy, or we can help you start a new policy if you would like to take advantage of this program. If you are a maple producer in NH and you are not a member the Maple Producers Association you can fill out an application on their website linked here: http://www.nhmapleproducers.com/application.html

NHMPA members will receive 10% off of Farm, Home and Auto insurance with CO-OP!   This is essentially the same group discount that the Vermont Maple Producers Association has enjoyed for years.  Thanks Co-Op for making this available to the great people of NH!  Visit our website http://www.downeyinsurance.com/ or call us for additional information at 603-439-2022 or stop by our office in Keene, NH at 45 Summer Street.

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