new york workers’ compensation october 1, 2018 loss cost ... · the premiums are then brought to...

New York Workers’ Compensation

October 1, 2018 Loss Cost Revision

Actuarial Committee Recommended Loss Cost Level Change:

-11.7% Proposed Loss Cost Level Change: 11.7%

Approved Loss Cost Level Change: 11.7%

The Rating Board submitted the 2018 General Loss Cost Revision to the New York State Department of Financial Services on May 15, 2018 requesting an average change of 11.7% in the loss cost level to become effective on October 1, 2018.

The loss cost revision reflects the experience of the two most recent policy years, as well as projected trends, benefit level changes, and changes in loss adjustment expenses. In addition, the proposed change reflects the impact of 2018 regulatory changes. The filing proposed no changes to the terrorism and catastrophe loss cost provisions.

The filing was approved on July 13, 2018.

The attached actuarial exhibits provide specific information on all components of the approved 2018 loss cost revision. Included also is the detailed Filing Memorandum that accompanied the Rating Board’s filing submission.

The Department of Financial Services’ approval letter is also attached and can be found following the actuarial exhibits.

New York Compensation Insurance Rating Board 733 Third Avenue New York, NY 10017 Tel: (212) 697-3535

New York Workers’ Compensation

October 1, 2018 Loss Cost Revision

Explanatory Memorandum

This memorandum, together with the attached actuarial exhibits, provides supporting documentation for an overall loss cost level change of -11.7%, to become effective on October 1, 2018.

The proposed loss cost change is based on the latest statistical data reported by the Rating Board’s member carriers and reflects the application of generally accepted actuarial principles and methodologies.

The elements contributing to the overall change are summarized below and are presented in detail on the following pages.

1. Change indicated by Policy Year 2016 experience 0.883 2. Change indicated by Policy Year 2015 experience 0.888 3. Average change indicated by experience [(1) + (2)] / 2 0.886 4. Change in prospective claim cost, frequency and wage levels 0.965 5. Change in loss adjustment expense (LAE) 1.011 6. Change due to experience, trend and LAE (3) x (4) x (5) 0.864 7. Change due to standard legislation and regulation 1.017 8. Indicated Manual Loss Cost Level Change (6) x (7) x (8) 0.879 9. Change in Terrorism Provision 1.000 10. Terrorism Provision loss cost as percent of total loss costs 0.025 11. Change in Provision for Natural Disasters and Industrial Cats. 1.000 12. Natural Disasters and Industrial Cats. Provision Loss Cost

as percent of total loss costs 0.005 13. Proposed Total Loss Cost Level Change

[(8) x (1.0 - (10) - (12)) + (9) x (10) + (11) x (12)] 0.883

A listing of the actuarial exhibits follows this explanatory memorandum providing easy reference for reviewing the underlying support for this filing.

October 1, 2018 Loss Cost Filing Explanatory Memorandum Page 2 1. Experience of Policy Years 2016 and 2015

The calculation of the indicated change in loss costs derived from the experience of Policy Year 2016 is presented as Exhibit B, and of Policy Year 2015 as Exhibit C.

The experience of Policy Years 2016 and 2015, valued as of December 31, 2017, has been compiled from the latest available statistical data submitted by the Rating Board's member companies. Similar to past years, large deductible experience is included in the determination of the indicated experience change. Although this experience is still viewed as unique and similar to self-insurance, its inclusion reflects the Department of Financial Services’ (“DFS”) long held position that this data should be included in the annual NYCIRB filing. Furthermore, at the previous direction of the DFS, the policy year indication also includes the experience of the State Insurance Fund.

Beginning with policy year 2008, standard premiums have been reported in the annual New York Financial Data Calls on a designated statistical reporting (“DSR”) level. DSR level represents standard premium reported to NYCIRB excluding the effect of carrier loss cost multipliers. As a result of removing loss cost multipliers, the premium becomes an expected loss cost level against which the actual loss experience can be measured.

The premiums are then brought to the current loss cost level. This adjustment is done in accordance with standard actuarial procedures, reflecting the latest approved loss cost level changes. The resulting final premium on level factors are 1.025 for policy year 2016 and 1.092 for policy year 2015. The on-level calculations are shown on Exhibit D, Sheet 1A (page 4). These factors also include “Experience Rating Off-Balance” adjustment factors which are intended to adjust the premiums to the same level of experience rating impact that is expected during the prospective filing period. The “Experience Rating Off-Balance” adjustment factors are 1.002 for PY 2016 and 1.003 for PY 2015. The derivation of these adjustment factors can be found on Exhibit D, Sheet 1B (page 5).

Similar to previous filings, the Rating Board has utilized paid plus case losses for the policy year loss evaluation. Indemnity and medical losses were analyzed separately in recognition of the significant differences in their respective development patterns.

Losses emanating from the September 11, 2001 terrorist attacks have been excluded from the ratemaking data. Both policy year 2000 and policy year 2001 losses have been adjusted to remove the effects of the September 11, 2001 experience that was identified and reported under Catastrophe Code 48. The definition of Catastrophe Code 48 encompasses claims directly arising from the commercial airline hijackings of September 11, 2001 and the resulting subsequent events with accident dates of September 11, 2001 through September 14, 2001.

For loss development, two, three, four and five-year average link ratios, as well as a three-year average, calculated after excluding the highest and lowest points, were analyzed for both indemnity and medical. Development patterns can vary at different report levels. Following examination of the different factors, the selected loss development methodology utilizes five-year average factors from first to twentieth reports to smooth the impact of any variations in the observed development patterns. This is consistent with the approach used in last year’s filing. Separate development factors

October 1, 2018 Loss Cost Filing Explanatory Memorandum Page 3

were derived for the non-large deductible experience, the large deductible experience, and the State Insurance Fund using the same methodology, except for the 11th to 12th report indemnity development ratio for the State Insurance Fund, where the middle three of five factors were used.

The procedure used to calculate the loss development factor from 20th to ultimate (the tail factor) is similar to the procedure used in last year’s filing, utilizing paid plus case losses and applying a growth factor. The growth factor is used to adjust the experience of prior years used in the tail calculation to the level of the base development year at 19th report. The adjustment is needed to reflect trend and benefit level changes in the historical experience. Information from Policy years 1987 through 1996 was included in the tail factor calculation. This approach is consistent with the methodology used by the National Council on Compensation Insurance (“NCCI”). An improvement, included in this year’s filing, is the utilization of eight reports of data at eight successive valuations. The final tail factor is determined by averaging these eight factors. This enhancement to the tail methodology should improve long term tail factor stability. Last year, a seven-year average was used.

Premium development factors for both non-large deductible and large deductible private carriers, as well as the State Insurance Fund, are based on three-year averages.

The private carrier non-large deductible development data can be found on Exhibits BB, Sheets 1 through 2I (pages 35-45). For large deductible development, exhibits labeled as Exhibit CC, Sheets 1-2E (pages 46-52) are provided. Exhibit DD, Sheets 1-2I (pages 53-63) contains the experience of the State Insurance Fund. These pages include premium development factors for the policy year, and separate indemnity and medical loss development factors. Because of the large volume of State Insurance Fund data, it is appropriate that projections of ultimate losses reflect this experience’s own development patterns. This is consistent with the approach utilized in past filings. Policy year losses for the private carrier non-large deductible experience, State Insurance Fund experience, and the large deductible experience are separately adjusted to an ultimate settlement basis, as described above.

Losses are then adjusted to reflect the current benefit level. This process includes adjusting the losses in the experience to reflect savings from certain components of the 2017 workers’ compensation reform. The benefit level adjustment factors also reflect differences in development factors between the pre- and post- 2007 environments. All losses in the experience period of policy years 2015 and 2016 have occurred subsequent to the 2007 reforms. The three major components of the 2007 reform are the increase in maximum weekly benefits, the elimination of the Special Disability Fund (“SDF”) and the introduction of capped benefit durations for claimants with non-scheduled Permanent Partial Disability Benefits (“NS-PPD”). In theory, losses that have occurred after the reform would not need to be adjusted for the full impact of the reform, as they are already at the post-reform level. However, because experience from pre-reform years is used to derive loss development factors, using the LDFs as reported may not result in appropriate post-reform ultimate losses. Therefore, some adjustments are warranted. The adjustment due to the implementation of duration caps is derived by restating any pre-reform link ratio from the reported development triangle to post-reform level. Then, the adjustment factor


is the ratio of the resulting ultimate development factor after the restatement to the ultimate factor based on the reported values. The restatement of each link ratio assumes that a portion of the development that is reflected in the link ratio is attributable to the unwinding of discount on life annuities on NSPPD injuries, while the remainder is due to other injuries. Based on Unit Statistical Data and data obtained from the Workers’ Compensation Board (“WCB”) on the distribution of losses prior to the reform, it was determined that 57.7% out of total indemnity costs are attributable to NSPPD, which is the portion of the development factor that needs to be adjusted. The remaining 42.3% of indemnity costs are not adjusted. The full details of the calculation are presented on Exhibit D, Sheet 4 (page 8) and the restated LDF triangle is shown on Exhibit D, Sheet 5 (page 9) for private carriers and Exhibit D, Sheet 6 (page 10) for the State Insurance Fund. The overall adjustment factor resulting from this procedure is 0.938.

With respect to the closing of the SDF, until three years ago, indemnity losses were adjusted upward by the full estimated impact of the reform (17.8%). This is because most of the loss development factors are from pre-reform years, and are therefore suppressed, as they reflect the subrogation from the SDF. As part of the 2013 filing, a new approach was taken to determine the impact of the SDF that needs to be applied to the reported losses. Based on information that was obtained from the Special Funds Conservation Committee with respect to the rate at which claims were accepted into the SDF, it was first determined that, on average, 5.8% of indemnity claims were affected by the SDF elimination. This percentage is multiplied by the percentage of cases accepted by the SDF at each development age, to determine the percentage out of all claims that were accepted by the SDF at each development age. The next step in the calculation is to restate each pre-reform link ratio in the loss development triangle using the following formula:

LRS = LRO x SDF% x AF + LRO x (1- SDF%) Where LRS = the Restated link ratio, LRO = Original Link Ratio SDF% = percentage of cases accepted to the SDF at a given development age AF = Adjustment Factor.

The adjustment factor was determined separately for the private carriers and the State Insurance Fund by restating the latest available loss development triangle which consisted entirely of pre-reform years (that was used as part of the 2008 Loss Cost Filing) in the same way as described above, such that the restated LDF to ultimate is 17.8% higher than the original LDF to ultimate. (This was the originally estimated impact of the reform on indemnity benefits). The 2008 triangles, which include the derivation of the adjustment factors, are shown on Exhibit D, Sheet 8 (page 12) for private carriers and Exhibit D, Sheet 10 (page 14) for the State Insurance Fund.


Then, the impact of the SDF that is used in this filing is determined as the ratio of the ultimate LDF in the restated triangle to the ultimate LDF in the original triangle. These impacts were 13.7% in the Private Carrier analysis and 13.6% in the SIF analysis. A weighted average using 60%/40% weights resulted in the overall impact 13.7%, as is shown in Exhibit D Sheet 7 (page 11). This impact is used in the loss on-level factors, which may be found in Exhibit D, Sheet 2 (page 6).

An additional adjustment is needed to account for the January 1, 2014 closing of the Re-Opened Case Fund (25-A). The adjustment involved using the same approach that is used to determine the SDF adjustment. It was estimated that the total impact of the Re-Opened Case Fund elimination was 6.3%. The adjustment accounts for the fact that carriers have been paying and reserving for re-opened claims over the last 4 calendar years, since the fund has been closed. This has been reflected on Exhibit D, Sheet 14 (page 18). After re-stating the loss development triangles, it was determined that the appropriate factors that need to be used in this year’s revision are 5.3% for indemnity, and 5.4% for medical. The derivation of these factors can be found on Exhibit D, Sheet 12 (page 16). The loss on-level calculations are presented on Exhibit D, Sheets 2 and 3 (pages 6-7). The standard loss on-level calculation is shown, followed by the adjustments for reforms described above, resulting in an overall factor to bring the losses to the current benefit level. The final indemnity loss on-level factors are 1.104 for PY 2016 and 1.100 for PY 2015. For medical, the factors are 1.054 for both PY 2016 and PY 2015. Loss cost indications are calculated separately for the non-large deductible and large deductible experience and are then weighted based on their respective net earned premiums to arrive at a decrease of 11.7% in loss cost level based upon Policy Year 2016 experience (Exhibit B) and decrease of 11.2% based on Policy Year 2015 experience (Exhibit C).

2. Average Experience Change

With equal weights given to the 11.7% decrease indicated by the Policy Year 2016 experience and the 11.2% decrease indicated by the Policy Year 2015 experience, the average effect of experience is a decrease of 11.4%.

3. Trend Factor Analysis

The presentation of the loss portion of the trend factor is similar to previous years in that indicated trends are expressed in terms of average annual changes in claim costs and claim frequencies. This year’s methodology, which is the same as filed last year, bases the indicated frequency and severities directly on the combined financial data of all private carriers (excluding large deductible experience) and the State Insurance Fund. All data has been adjusted to current levels, i.e., the premiums underlying the frequency calculation are adjusted to the current loss cost level and losses are adjusted to an estimated ultimate settlement basis, as well as to the current benefit level in the same manner as previously described. Premium amounts are also adjusted to a consistent “experience rating off balance”. This refers to the overall impact of the experience rating, which may differ from year to year. This adjustment, which was


introduced with the 2016 loss cost filing, ensures that the overall trend results measures pure changes in claim frequency, which may be misrepresented if this adjustment is not made. Claim counts have also been adjusted to ultimate values. It should be noted that the claim counts reported in the financial data include only lost-time claims, i.e., medical-only claim counts are not part of the analysis under this methodology. This produces a more material trend since, while medical-only cases represent over 60% of the total claims, they represent less than 4% of the losses. The inclusion of medical-only claims in a frequency and severity analysis can have a misleading effect on the final trend. The exclusion of medical-only claims results in a greater focus on medical costs on lost-time claims, which are a major cost driver in the workers’ compensation system. Exhibit EE, Sheets 1-3 (pages 64-66) show the derivation of the indicated claim frequency trend and the claim cost trend for both indemnity and medical losses. Since 2012, claim frequency in New York experienced a slight decrease each year except 2015, resulting in a small negative five-year frequency trend. Claim costs continue to increase though at a lower rate than was observed last year. In this revision, consistent with the approach used in the past several filings, a five-year exponential trend analysis was performed to derive the indicated trends. For claim frequency, the analysis resulted in an annual trend of -0.4%. For indemnity severity, the regression resulted in an annual trend of 3.2%. For medical severity, the five-year exponential regression produced the indicated annual trend of 0.5%. In order to determine the wage trend, results from exponential and linear regressions of the latest five years of the state average weekly wage as published by the New York State Department of Labor (“DOL”), were examined. The top section of Exhibit EE, Sheet 4 (page 67), shows the results of these regression analyses. However, the indicated annual wage trend of 2.6%, which is based on historical wage changes, may differ from the actual wage change during the trend period, i.e., from the experience period through the prospective filing policy period. Per the New York State Assembly’s 2018 Economic Report, average wage growth is expected to be 2.5% in 2018 and 3.7% in 2019. Using these projections, the average annual expected wage growth from the experience period to the prospective filing period is 3.0%. As can be seen on Exhibit E Sheet 1 (page 25), combining the frequency, severity and wage trends results in a combined annual trend of 0.989 or -1.1%. This overall annual trend factor represents a decrease from the annual trend factor in last year’s filing. After projecting over the full trend period, the total proposed trend factor is 0.965, or -3.5%.

4. Loss Adjustment Expense

The indicated change in loss adjustment expense can be found on Exhibit F on page 26. In this filing, similar to last year, loss adjustment expense has been determined based on paid policy year and accident year Financial Call data for Defense and Cost Containment Expense (“DCCE”), and on Insurance Expense Exhibit data for Adjusting and Other Expense (“AOE”). The utilization of Financial Call data for determining DCCE provides a stable base for measuring these expenses and is


the most current data available. Ratios of paid DCCE to paid loss is an accurate measure of these costs since any variability over time in reserves for either loss or DCCE does not enter the calculation of this factor. AOE continues to be based on Insurance Expense Exhibit data since it is the only data available with which to calculate this expense.

For both DCCE and AOE, the effects of the 2007 reforms on losses have been taken into account implicitly in the development factors. The historical underlying policy year and accident year indemnity losses were brought to the post-reform benefit level through adjustment to the loss development factors, which are reported at pre-reform levels. Loss amounts have also been adjusted to reflect the impacts of the revision of Schedule-Loss-of-Use impairment guidelines and the proposed changes to the New York State Medical Fee Schedule (see below). For AOE, ratios of indemnity to total loss were estimated for each calendar period. Similar to last year’s filing, an average of the latest three years of policy year and accident year ratios were used to determine the final DCCE provision. The use of the latest three years is considered to be responsive to the latest trends in DCCE ratios observed in both the policy year and accident year experience. For AOE, the five-year average continues to be used for this element of loss adjustment expense. The proposed 1.174 factor for LAE represents an increase of 1.1% in this provision of the loss cost.

5. Legislative and Regulatory Changes – Standard Update due to Increase in Maximum Weekly Benefits

In accordance with the 2007 legislation, the maximum weekly benefit for injured workers increasedto 2/3 of the statewide average weekly wage effective July 1, 2010, indexed annually on July 1 of each subsequent year to the statewide average weekly wage published by the New York Department ofLabor.

The determination of the loss cost impact resulting from the statutory benefit changes that raise theminimum or maximum weekly benefit continues to be based on a universally accepted actuarialmethodology developed by Barney Fratello in a paper entitled “The Workmen’s Compensation InjuryTable and Standard Wage Distribution Table – Their Development and Use in Workers’ CompensationInsurance Ratemaking”, published by the Casualty Actuarial Society. This publication, or portionsthereof, has been used for over fifty years by actuaries in all jurisdictions to price the effects ofchanges in the maximum weekly benefit that are either proposed or enacted by their respective statelegislatures. The incorporation of a state’s current statutory maximum weekly benefit, the newmaximum weekly benefit, the state’s average weekly wage and the 2010 ‘Standard Actuarial WageDistribution Table’ enable an actuary to produce an accurate estimate of the benefit cost whenchanges to the maximum are proposed or enacted.

The actual methodology used by the NYCIRB to calculate the effects of changes in the maximumweekly benefit is a Limit Factor Analysis, as set forth in Mr. Fratello’s actuarial paper. For a betterunderstanding of the method, the following should be especially noted:

• While the methodology refers to average benefits and wage levels, these are expressed interms of ratios for use with the Wage Distribution Table and are not intended to be actualvalues.


• The methodology only measures changes in the minimum and maximum benefits, orpercentage that these benefits bear to an employee’s wages, and nothing more. It assumesthat the current administrative functions within the workers’ compensation system and thelevel of disability or impairment of the injured workers that determines these benefits are atthe current level.

• The methodology also reflects potential increases in utilization of the system as a result of the increase in benefits. In other states, when large benefit changes were enacted, it was oftenseen that more claimants applied for the more generous benefits, which resulted in higheractual effects than the actuarial estimates were able to predict.

The determination of the overall impact in New York of increasing the maximum weekly benefits as of July 1, 2018, and then on July 1, 2019 and July 1, 2020, can be found on Exhibit GG. Exhibits GG sheets 1 through 3 (pages 68-70) display the calculation of the 2018, 2019 and 2020 benefit changes, respectively. Note that it was assumed that the average weekly wage will increase by 2.5% in 2018 and 3.7% in 2019. The methodology is performed separately for each injury type [death, permanent total, permanent partial and temporary] to recognize any variation in the maximum, as a percent of wage, that is provided for by statute. Recognition has also been given to the lower wage levels of PPD claimants and the manner of determining benefits that is used by the WCB for PPD cases. This is consistent with last year’s calculation.

Once the indicated changes are determined by injury type, these changes are applied to a distribution of incurred losses by injury type to obtain the estimated change in total indemnity costs. A five-year distribution of losses by injury type has been used to provide stability to this part of the analysis. The resultant indicated indemnity change is then weighted with the distribution of indemnity and medical losses based on 2016 policy year financial data to obtain an overall change. The Rating Board analysis then includes a utilization factor of 1.10 that contemplates the additional utilization of the workers’ compensation system as a result of the significantly higher benefit level. This adjustment is consistent with the utilization factor used in last year’s analysis.

The increases in the maximum weekly benefit, as summarized in Exhibit G, Sheet 1 (page 27) is expected to result in a 1.1% increase in total workers’ compensation claim costs.

6. Other Legislative and Regulatory Changes

A. New York State Medical Fee ScheduleOn April 17, 2018 the WCB published Subject Number 046-1058, which includes a proposal torevise the New Yok State Medical Fee Schedule. The WCB has indicated to the Rating Boardthat the changes would consist of increasing the fee schedule conversion factors in a non-uniform manner and making other changes that in total are expected to result in an overallaverage increase of 22.9% in physician reimbursement levels. Based on information from theNew York Medical Data Call, physician costs represent 43.7% of total medicalcosts. Therefore, the impact on medical costs is 10.0% (= 22.9% x 43.7%). Medical costsrepresent 35% of overall system costs, and therefore the overall estimated impact of thischange on loss costs is 3.5% (= 10.0% x 35%). This calculation is summarized in Exhibit G,


Sheet 2. The potential for behavioral changes in the system as a result of this revision was considered, but its impact cannot be determined at the present time. This is so because behavior change may increase utilization of medical services, resulting in additional costs to the system. However, such additional costs may be offset by improved outcomes for injured workers. Further, the change to the fee schedule may impact the mix of medical services utilized.

B. Revised Schedule-Loss-of-Use Impairment GuidelinesIn accordance with the 2017 legislation, permanent partial schedule-loss-of-use (SLU)impairment guidelines were revised effective January 1, 2018. One of the primarycomponents of this revision, which was explicitly accounted for in this filing, was theelimination of impairment percentage add-ons if they experienced a rotator cuff surgery(10%) or knee tear surgery (7.5%). For example, under the prior guidelines, an injured workerwho had otherwise 25% permanent loss of use of his/her arm, would be eligible for anadditional 10% if he/she experienced a rotator cuff surgery for a total SLU impairment of35%. Based on data obtained from the WCB, the Rating Board’s Unit Statistical Data andMedical Transactional Data it is estimated that the overall impact on SLU awards is an average decrease of 12.3%. Because these awards represent 35.7% of indemnity costs, the impact onindemnity costs is -4.4% (= -12.3% x 35.7%). Indemnity costs represent 65% of overall systemcosts and therefore the overall loss cost impact of this change is -2.8% (= -4.4% x 65%). Thedetails of these calculations are provided in Exhibit G, Sheets 3 & 4.

Other provisions of the revised guidelines apply to impairment ratings for joint replacements, as well as to the measurement of loss-of-use as comparison to the uninjured contralateral part of body. There is insufficient data to estimate the cost impact of these provisions, and their impact will be reflected in future loss experience.

The combined effect of the increase in the maximum weekly benefits, the change in the medical fee schedule, and the revised SLU impairment guidelines is 1.017 (= 1.011 x 1.035 x 0.972), and is shown in Exhibit A, row 7. Additional savings from the 2017 reform have been included in the benefit level loss adjustment factors, as described in the experience section above.

7. Catastrophe Provisions

In January 2015, the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA) extended the federal backstop for terrorism through December 31, 2020.

The Rating Board has retained a catastrophe modeler (AIR Worldwide) to evaluate the proper level ofterrorism loss costs in New York. The report issued by AIR indicated terrorism loss costs that vary byyear, based on increased carrier retention levels as required by TRIPRA. Based on the information inthe report, and following a payroll limitation adjustment, a loss cost of $0.045 (per $100 of payroll)was filed and approved as part of 2015’s loss cost filing. In this year’s filing, despite an increase in the


carrier retention levels in 2019, no change is proposed in the terrorism loss cost provision. This is explained on Exhibit H (page 32).

Also, note that no change in the loss cost provision for natural disasters and catastrophic industrial accidents is being proposed.

8. Industry Group Differentials

Industry group differentials are used to more equitably distribute the overall loss cost level change toindividual employer classifications. Nine industry groups are used in this analysis and are listed below:

Food and Beverage Manufacturing Stores and Dealers-Wholesale/Retail Chemical Manufacturing Professional and Office All Other Manufacturing Services Contracting Miscellaneous Maritime, Admiralty and Federal

The industry group methodology entails a compilation of the latest five years of Unit Statistical Plan data into the nine industry groups, and utilizes loss cost ratios as the basis for calculating a differential for each group relative to the statewide average (Exhibit I, Sheet 1 on page 33). In years prior to the 2012 filing, three years had been used. The change to five years was introduced in 2012 to further stabilize the industry group differentials from year to year. The underlying base is standard premium at current loss cost level and includes payroll development. To adjust premiums from the reported historical levels to current level, an “extension of exposures” procedure is used. This procedure multiplies the reported payroll for each class on a policy by the current class loss cost, and then multiplying by the experience rating modification factor for the policy. Incurred losses have been developed to ultimate and are at the October 1, 2018 benefit level to be consistent with the classification pure premiums. The development of losses to ultimate and application of trend and excess factors was done in accordance with the revised methodology approved by the DFS in 2015. Credibility for each industry group is based on the five-year total number of lost-time claims, with an industry standard of 12,000 lost-time claims as the standard for full credibility. The credibility standard is intended to enable each industry group differential to be more representative of the actual experience of the respective industry groups.

Partial credibility for each group is determined by the formula (N/T)^1/2, where N is the five-year total of lost-time claims for the industry group and T is 12,000 lost-time claims. The complement of credibility is the loss ratio for all groups combined. Indicated differentials are calculated by relating each credibility-weighted industry group’s loss ratio to the overall total loss ratio. As in past revisions, an additional refinement to the indicated differential is included which recognizes different wage trends by industry group (Exhibit I, Sheet 2 on page 34). The final differentials will be applied as part of the process which calculates loss costs from class pure premiums. The use of relativities by industry group provides a more refined and equitable distribution of the overall loss cost level to each class. To ensure overall balance, after the differentials are applied in the determination of class loss costs, a test of loss costs will become the final step in the process.


9. Classification Pure Premiums

Classification pure premiums are based on the experience of all carriers for the five policy years 2011- 2015. In addition, excess losses in the layer over $500,000 per claim are excluded from the purepremium development. Consistent with past revisions, five years of experience are used to determine the proposed pure premiums for all classes. The classification experience was calculated inaccordance with the revised methodology approved by the DFS in 2015.

Complete details with respect to the classification experience are contained in a document that will be provided to the DFS separately.

10. Changes in Loss Cost by Classification and Industry Group

A table showing the percentage change in loss cost level for each classification and industry group and the number of classifications for which loss costs are to be increased or decreased, as well as those towhich no change will be applicable, will be provided upon approval.

Loss cost changes for each classification will be limited to +/- 25% from the calculated industry groupchange to minimize the swings in loss cost level by class while still maintaining a proper relativitystructure.

11. Total Change

The above analyses result in an indicated manual loss cost level change of -12.1%. When combinedwith no change in the loss cost provisions for terrorism, natural disasters, and catastrophic industrialaccidents, an overall change of -11.7% is proposed.

12. Effective Date

It is proposed that the filed loss costs and related rating values, after approval by DFS, becomeeffective on October 1, 2018 for new and renewal business.

New York Workers Compensation

2018 Loss Cost Revision

List of Exhibits

Principal Exhibits Page

Exhibit A - Summary - All Elements ......................................................................................................1

Exhibit B - Determination of Policy Year 2016 Loss Cost Indication .....................................................2

Exhibit C - Determination of Policy Year 2015 Loss Cost Indication .....................................................3

Exhibit D - On-Level Factors and Development Reform Adjustments ................................................ ..4

Exhibit E - Trend Factors ....................................................................................................................25

Exhibit F - Loss Adjustment Expense .................................................................................................26

Exhibit G - Legislative and Regulatory Changes ..................................................................................27

Exhibit H - Terrorism and Natural Catastrophes .................................................................................32

Exhibit I - Industry Group Differentials .............................................................................................33

Exhibit J - Pure Premium Multipliers .............................................................................................Φ.Φ...ор

Exhibit K - Loss Cost Level Changes by Industry Group .......................................................................36

Exhibit L - Loss Cost Swing Limits by Industry Group ..........................................................................37

Supporting Exhibits

Exhibit AA - Test of Loss Cost Level ........................................................................................................38

Exhibit BB, Sheet 1 - Private Carrier Policy Year Premium Development Factors .................................39

Exhibit BB, Sheets 2 – 2I - Private Carrier Policy Year Loss Development Factors ................................40

Exhibit CC, Sheet 1 - Large Deductible Policy Year Premium Development Factors .............................50

Exhibit CC, Sheets 2 – 2E - Large Deductible Policy Year Loss Development Factors .............................51

Exhibit DD, Sheet 1 - State Insurance Fund Policy Year Premium Development Factors .......................57

Exhibit DD, Sheets 2 – 2I - State Insurance Fund Policy Year Loss Development Factors ......................58

Exhibit EE, Sheets 1 – 4 - Trend Analysis ...............................................................................................68

Exhibit GG, Sheets 1 – 3 - Benefits .......................................................................................................72

Approval Letterer

October 2018 Loss Cost RevisionExhibit A

2 Policy Years

1. Loss Cost Change Indicated by Policy Year 2016 Experience (Exhibit B) 0.883 *

2. Loss Cost Change Indicated by Policy Year 2015 Experience (Exhibit C) 0.888 *

3. Average Loss Cost Change Indicated by Experience [(1)+(2)] / 2 0.886 *

4. Projected Change in Loss Costs (Exhibit E) 0.965

5. Change in Loss Adjustment Expenses (Exhibit F) 1.011

6. Indicated Change in Loss Costs Based on Experience 0.864[(3) x (4) x (5)]

7. Legislative and Regulatory Changes (Exhibit G) 1.017 **

8 Indicated Total Loss Cost Change 0.879[(6) x (7) x (8)]

9. Change in Terrorism Provision (Exhibit H) 1.000

10. Terrorism Provision Loss Cost as Percent of Total Loss Costs 0.025

11. Change in Provision for Natural Disasters and Industrial Cats. (Exhibit H) 1.000

12. Natural Disasters and Industrial Cats. Provision Loss Cost as Percent of Total Loss Costs 0.005

13. Total Proposed Premium Level Change 0.883[(8) x (1.0 - (10) - (12)) + (9) x (10) + (11) x (12)]

* Values shown in lines 1, 2, and 3 reflect savings from certain components of the 2017 reform.See Exhibits B, C, and D for additional information.

** Certain components of the 2017 reform are accounted for in lines 1, 2, and 3.

Workers' Compensation - New York

General Loss Cost Revision - October 1, 2018

Summary - All Elements

Page 1

October 2018 Loss Cost RevisionExhibit B

To Adjusted Excl. Lge. Ded. Lge. Ded.Valued as of 9/30/2018 Development Data Loss Cost Loss Cost12/31/2017 Levels # Factors * (1) x (2) x (3) Change Change

(1) (2) (3) (4) (5) (6)

1. Expected Total Losses**a. Excl. Large Ded. 2,291,340,647 1.025 1.011 2,374,459,029b. Large Deductible 2,204,211,106 1.025 1.021 2,306,762,028c. SIF 1,914,554,762 1.025 0.998 1,958,493,794d. Total Std. Ed. Prem. a+c 4,205,895,409 4,332,952,823

2. Case Basis Indemnity Lossesa. Excl. Large Ded. 453,487,793 1.104 2.296 1,149,493,602 0.484 ------b. Large Deductible 438,572,880 1.104 2.759 1,335,864,924 ------ 0.579c. SIF 382,214,364 1.104 2.309 974,316,395 0.497 ------d. Total Ind. Losses a+c 835,702,157 2,123,809,997 0.490 ------

3. Case Basis Medical Lossesa. Excl. Large Ded. 324,433,079 1.054 1.820 622,353,487 0.262 ------b. Large Deductible 290,649,683 1.054 2.273 696,321,653 ------ 0.302c. SIF 281,733,091 1.054 1.697 503,918,512 0.257 ------d. Total Med. Losses a+c 606,166,170 1,126,271,999 0.260 ------

4. Indicated Change in Indemnity & Medical Loss Costs 0.750 0.881Col.(5) = (2d) + (3d); Col. (6) = (2b) + (3b)

5. Loss Cost Change, incl. Loss Adjustment Expense (4) x 1.161 0.871 1.023

6. Weights Based on Net Earned Premium 0.924 0.076

7. Final Policy Year 2016 Loss Cost Indication 0.883 [Col (5), (5)*(6)] + [Col (6), (5)*(6)]

# See Exhibit D.

* Development Factors are from Exhibit BB for Private Carriers; Exhibit CC for Large Deductible; Exhibit DD for SIF.

** Expected Losses Represent Standard Premium at NYCIRB DSR (loss cost) Level.


Determination of Change in Manual Loss Cost Level

Experience of All Carriers - Paid + Case

Policy Year 2016 Experience

Page 2

October 2018 Loss Cost RevisionExhibit C

To Adjusted Excl. Lge. Ded. Lge. Ded.Valued as of 9/30/2018 Development Data Loss Cost Loss Cost12/31/2017 Levels # Factors * (1) x (2) x (3) Change Change

(1) (2) (3) (4) (5) (6)

1. Expected Total Losses**a. Excl. Large Ded. 2,052,550,520 1.092 0.999 2,239,143,783b. Large Deductible 1,901,664,949 1.092 1.007 2,091,154,451c. SIF 1,793,129,556 1.092 0.992 1,942,432,695d. Total Std. Ed. Prem. a+c 3,845,680,076 4,181,576,478

2. Case Basis Indemnity Lossesa. Excl. Large Ded. 573,506,535 1.100 1.561 984,768,071 0.440 ------b. Large Deductible 620,675,645 1.100 1.781 1,215,965,656 ------ 0.581c. SIF 587,362,255 1.100 1.586 1,024,712,190 0.528 ------d. Total Ind. Losses a+c 1,160,868,790 2,009,480,261 0.481 ------

3. Case Basis Medical Lossesa. Excl. Large Ded. 368,492,799 1.054 1.527 593,073,683 0.265 ------b. Large Deductible 339,240,642 1.054 1.807 646,110,263 ------ 0.309c. SIF 365,381,381 1.054 1.441 554,946,357 0.286 ------d. Total Med. Losses a+c 733,874,180 1,148,020,040 0.275 ------

4. Indicated Change in Indemnity & Medical Loss Costs 0.756 0.890Col.(5) = (2d) + (3d); Col. (6) = (2b) + (3b)

5. Loss Cost Change, incl. Loss Adjustment Expense (4) x 1.161 0.877 1.033

6. Weights Based on Net Earned Premium 0.928 0.072

7. Final Policy Year 2015 Loss Cost Indication 0.888 [Col (5), (5)*(6)] + [Col (6), (5)*(6)]

# See Exhibit D.

* Development Factors are from Exhibit BB for Private Carriers; Exhibit CC for Large Deductible; Exhibit DD for SIF.

** Expected Losses Represent Standard Premium at NYCIRB DSR (loss cost) Level.


Determination of Change in Manual Loss Cost Level

Experience of All Carriers - Paid + Case

Policy Year 2015 Experience

Page 3

October 2018 Loss Cost RevisionExhibit DSheet 1A

Section A - Factor Adjusting 2015 Policy Year Loss Costs to Present Level

(1) (2) (3) (4) (5) (6) (7)

Rate Adj. Factor Off-balance Premium Level Cumulative Product Cumulative Index/ Adjustment Adjustment

Date Change Index Weight (2)x(3) Sum Column (4) Factor* Factor

NR 10/01/14 Base 1.000 0.750 0.750 1.089 1.003 1.092NR 10/01/15 1.056 1.056 0.250 0.264NR 10/01/16 1.096 1.157 0.000NR 10/01/17 0.954 1.104

1.014

Section B - Factor Adjusting 2016 Policy Year Loss Costs to Present Level

(1) (2) (3) (4) (5) (6) (7)

Rate Adj. Factor Off-balance Premium Level Cumulative Product Cumulative Index/ Adjustment Adjustment

Date Change Index Weight (2)x(3) Sum Column (4) Factor* Factor

NR 10/01/15 Base 1.000 0.750 0.750 1.022 1.002 1.025NR 10/01/16 1.096 1.096 0.100 0.109

NR/OS 04/10/17 0.993 1.089 0.150 0.164NR 10/01/17 0.954 1.046 0.000 0.000

1.023

NR: New and renewal business.*1.003 = 0.948 / 0.945 = (Targeted Off-balance) / (Off-balance for Policy Year 2015)*1.002 = 0.948 / 0.946 = (Targeted Off-balance) / (Off-balance for Policy Year 2016)

Determination of On-level Factors


Page 4

October 2018 Loss Cost RevisionExhibit DSheet 1B

Section B1 - Premium Off-balance Adjustment Factor

(1) (2) (3) (4) (5) (6)= (5)/(4)

Average Average Average Weighted Policy YearIntrastate Interstate Merit Rating Average Targeted Off-balance

Rating Year Mod Mod Factor Off-balance Off-balance* Adjustment Factor

2012 0.951 0.872 0.933 0.935 0.948 1.0142013 0.958 0.869 0.933 0.939 0.948 1.0102014 0.977 0.868 0.936 0.948 0.948 1.0002015 0.969 0.871 0.931 0.945 0.948 1.0032016 0.967 0.877 0.933 0.946 0.948 1.002

* Based on a target intrastate mod of (D) and expected results for the average interstate mod, merit rating factor and weights for each category.



Page 5

October 2018 Loss Cost RevisionExhibit D

Sheet 2Workers' Compensation - New York

Section C - Factor Adjusting 2015 Policy Year Indemnity Losses to Present Benefit Level

(1) (2) (3) (4) (5)

Benefit Adj. FactorLevel Cumulative Product Cumulative Index/

Date Change Index Weight (2)x(3) Sum Column (4)

07/01/14 Base 1.000 0.123 0.123 0.98007/01/15 1.0077 1.008 0.750 0.75607/01/16 1.0044 1.012 0.127 0.12904/10/17 0.9730 0.98507/01/17 1.0033 0.988

1.008

Adjustment Factors*Special Disability Fund 1.137Re-opened Case Fund 1.053

Duration Caps 0.938Adjusted Loss On-level Factor 1.100

Section D - Factor Adjusting 2016 Policy Year Indemnity Losses to Present Benefit Level

(1) (2) (3) (4) (5)



07/01/15 Base 1.000 0.124 0.124 0.98307/01/16 1.0044 1.004 0.611 0.61304/10/17 0.9730 0.977 0.139 0.13607/01/17 1.0033 0.980 0.127 0.124

0.997

Adjustment Factors*Special Disability Fund 1.137Re-opened Case Fund 1.053

Duration Caps 0.938Adjusted Loss On-level Factor 1.104

* Reform adjustment factors are intended to adjust losses to benefit level changes that are not yet reflected in development factors.


Page 6


Sheet 3

Section E - Factor Adjusting 2015 Policy Year Medical Losses to Present Benefit Level

(1) (2) (3) (4) (5)



12/01/10 Base 1.000 1.000 1.000 1.000

1.000

Adjustment Factors*Re-opened Case Fund 1.054

Adjusted Loss On-level Factor 1.054

Section F - Factor Adjusting 2016 Policy Year Medical Losses to Present Benefit Level

(1) (2) (3) (4) (5)



12/01/10 Base 1.000 1.000 1.000 1.000

1.000

Adjustment Factors*Re-opened Case Fund 1.054

Adjusted Loss On-level Factor 1.054

* Reform adjustment factors are intended to adjusted losses to benefit level changes that are not yet reflected in development factors.



Page 7


Sheet 4

Paid + Case 1st to 20th 20th to Ult 1st to Ult Total Full Year % of Year TotalOriginal Restated Adjustment Original Restated Adjustment Adjustment Adjustment Impacted Adjustment

PY 08 PC 2.220 2.144 0.966 1.034 1.015 0.982 0.949 -5.1% 100% -5.1% 60%SIF 2.159 2.062 0.955 1.070 1.032 0.964 0.921 -7.9% 100% -7.9% 40%

Total -6.2%0.938

Restating the LDFs for Duration Cap: Example

(1) Original factor: Private Carriers: PY 2005 7th to 8th link ratio 1.025(2) Development portion 0.025(3) % of Non Sched out of total PPD 66.7%(4) % of PPD out of total indemnity 86.6%(5) % Non Scheduled out of indemnity (3)x(4) 57.7%(6) Development portion that is NSPPD (2)x(5) 0.014(7) Development portion that is other than NSPPD (2)-(6) 0.011(8) % of cases effected by limited duration* 55%(9) Restated NSPPD development portion (6) x [1-(8)] 0.006

(10) Restated total development 1+(9)+(7) 1.017

* Row (8) assumes at this point in the development, 55% of cases are now limited, whereas before they were still developing. 45% of the cases are stilldeveloping at this point in the triangle, even after the reform, as they still haven't reached the maximum duration. These assumed percentages can befound on the top of each column of the "restated" triangles. The percentages are based on a distribution of severities obtained from the WCB.

Development: Duration Cap Reform Adjustment Summary

Page 8

66.7% Non Sched out of PPD October 2018 Loss Cost Revision86.56% PPD out of Indemnity Private Carriers: Policy Year Indemnity Paid + Case Development Exhibit D57.72% % Impacted Sheet 5

ORIGINAL TRIANGLEPY 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 20-ULT

1993 1.003 1.0341994 1.005 1.004 1.0341995 1.004 1.003 1.005 1.0341996 1.004 1.002 1.003 1.001 1.0341997 1.004 1.001 1.004 1.004 1.004 1.0341998 1.004 1.004 1.003 1.005 0.9991999 1.003 1.006 1.004 1.001 1.0072000 1.005 1.007 1.002 1.001 1.0042001 1.004 1.004 0.998 1.010 1.0112002 1.017 1.009 1.007 1.004 1.0022003 1.012 1.012 1.006 1.006 1.0052004 1.025 1.012 1.006 0.993 1.0102005 1.025 1.013 1.008 1.006 1.0072006 1.028 1.016 1.008 1.005 1.0082007 1.044 1.011 1.010 1.007 1.0072008 1.047 1.025 1.008 1.003 1.0052009 1.116 1.037 1.013 1.007 1.0072010 1.220 1.093 1.035 1.011 1.0082011 1.512 1.203 1.091 1.066 1.0052012 1.493 1.189 1.056 1.0282013 1.495 1.165 1.0872014 1.448 1.1722015 1.407

5 Year Average 1.471 1.190 1.089 1.043 1.020 1.012 1.012 1.012 1.009 1.010 1.004 1.006 1.003 1.005 1.005 1.003 1.004 1.003 1.003 1.034

RESTATED TRIANGLE POST DURATION CAP ADJUSTMENTPY 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 20-ULT

% Cases affected 0 2 5 15 25 40 55 70 75 80 85 90 95 95 95 95 95 95 95 951993 1.001 1.0151994 1.002 1.002 1.0151995 1.002 1.001 1.002 1.0151996 1.002 1.001 1.001 1.000 1.0151997 1.002 1.000 1.002 1.002 1.002 1.0151998 1.002 1.002 1.001 1.002 1.0001999 1.001 1.003 1.002 1.000 1.0032000 1.002 1.003 1.001 1.000 1.0022001 1.002 1.002 0.999 1.005 1.0052002 1.009 1.005 1.003 1.002 1.0012003 1.007 1.006 1.003 1.003 1.0022004 1.015 1.007 1.003 0.996 1.0052005 1.017 1.008 1.005 1.003 1.0042006 1.024 1.013 1.006 1.004 1.0052007 1.044 1.011 1.010 1.007 1.0072008 1.047 1.025 1.008 1.003 1.0052009 1.116 1.037 1.013 1.007 1.0072010 1.220 1.093 1.035 1.011 1.0082011 1.512 1.203 1.091 1.066 1.0052012 1.493 1.189 1.056 1.0282013 1.495 1.165 1.0872014 1.448 1.1722015 1.407

5 Year Average 1.471 1.190 1.089 1.043 1.020 1.012 1.010 1.008 1.006 1.005 1.002 1.003 1.001 1.002 1.002 1.001 1.002 1.001 1.001 1.015

Original 1st to 20th 2.220 Original 20th to Ult 1.034 Total Dev Adjustment 0.949Restated 1st to 20th 2.144 Restated 20th to Ult 1.015 or -5.1%

Adjustment 0.966 Adjustment 0.982

Page 9

66.7% Non Sched out of PPD October 2018 Loss Cost Revision86.6% PPD out of Indemnity State Insurance Fund: Policy Year Indemnity Paid + Case Development Exhibit D57.7% % Impacted Sheet 6

ORIGINAL TRIANGLEPY 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-11 11-12* 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 20-ULT

1993 1.006 1.0701994 1.009 1.010 1.0701995 1.009 1.010 1.005 1.0701996 1.011 1.012 1.003 1.007 1.0701997 1.009 1.010 1.007 1.007 1.007 1.0701998 1.009 1.009 1.006 1.010 1.0081999 1.026 1.013 1.003 1.006 1.0082000 1.009 1.007 1.006 1.011 1.0112001 1.082 1.011 1.002 1.006 1.0052002 1.010 1.006 1.004 1.007 1.0082003 0.999 1.021 1.002 1.011 1.0042004 0.999 1.010 1.004 0.998 1.0082005 1.005 1.004 1.004 1.011 1.0072006 0.994 1.002 1.000 1.011 1.0102007 1.017 1.002 0.991 0.996 0.9952008 1.025 1.018 0.996 1.008 1.0032009 1.091 1.027 1.007 1.007 1.0022010 1.217 1.073 1.025 1.001 0.9992011 1.497 1.192 1.044 1.038 1.0072012 1.433 1.188 1.093 1.0522013 1.448 1.235 1.0822014 1.472 1.2192015 1.432

5 Year Average 1.456 1.210 1.077 1.033 1.010 1.000 1.002 1.000 1.004 1.011 1.005 1.009 1.009 1.008 1.007 1.009 1.009 1.007 1.007 1.070

RESTATED TRIANGLE POST DURATION CAP ADJUSTMENTPY 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-11 11-12* 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 20-ULT

% Cases affected 0 2 5 15 25 40 55 70 75 80 85 90 95 95 95 95 95 95 95 951993 1.003 1.0321994 1.004 1.005 1.0321995 1.004 1.005 1.002 1.0321996 1.005 1.005 1.001 1.003 1.0321997 1.004 1.005 1.003 1.003 1.003 1.0321998 1.004 1.004 1.003 1.005 1.0041999 1.012 1.006 1.001 1.003 1.0042000 1.004 1.003 1.003 1.005 1.0052001 1.042 1.005 1.001 1.003 1.0022002 1.005 1.003 1.002 1.003 1.0042003 0.999 1.011 1.001 1.005 1.0022004 0.999 1.006 1.002 0.999 1.0042005 1.003 1.002 1.002 1.006 1.0042006 0.995 1.002 1.000 1.008 1.0072007 1.017 1.002 0.991 0.996 0.9952008 1.025 1.018 0.996 1.008 1.0032009 1.091 1.027 1.007 1.007 1.0022010 1.217 1.073 1.025 1.001 0.9992011 1.497 1.192 1.044 1.038 1.0072012 1.433 1.188 1.093 1.0522013 1.448 1.235 1.0822014 1.472 1.2192015 1.432

5 Year Average 1.456 1.210 1.077 1.033 1.010 1.000 1.001 1.000 1.002 1.006 1.003 1.004 1.004 1.004 1.003 1.004 1.004 1.003 1.003 1.032

Original 1st to 20th 2.159 Original 20th to Ult 1.070 Total Dev Adjustment 0.921Restated 1st to 20th 2.062 Restated 20th to Ult 1.032 or -7.9%


* Mid 3 of 5 Year average for the 11th-12th

Page 10


Sheet 7

Weight SDF ImpactPrivate Carriers (see Exhibit D, Sheet 9) 60% (a) 13.7% (c)State Insurance Fund (see Exhibit D, Sheet 11) 40% (b) 13.6% (d)Totals SDF Impact = (a)x(c) + (b)x(d) 13.7%

1) Total SDF Claims Accepted (Private Carriers + SIF)* 27,1022) Total Workers Compensation Indemnity Claims ** 470,2533) Percentage of Claims Assumed to be in the SDF = (1)/(2) 5.76%

*Data Based on Accident Years 1998-2005 from Special Funds Conservative Committee**Data Based on Accident Years 1998-2005 from New York Financial Call Information System

Derivation of Special Disability Fund Adjustment

Percentage of Claims Accepted by the Special Disability Fund

Page 11

2008 SDF Adjustment5.8% Percentage of claims assumed to be in the SDF October 2018 Loss Cost Revision

1.189 Impact Private Carriers: Policy Year Paid + Case Development Exhibit D17.80% Target Impact 17.7% Sheet 8

ORIGINAL TRIANGLEPY 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-ULT

1984 0.999 1.0401985 1.000 1.015 1.0401986 1.009 0.997 1.009 1.0401987 1.019 1.004 1.016 1.019 1.0401988 1.002 0.979 1.017 1.012 0.991 1.0401989 1.012 0.996 1.015 1.009 0.9991990 1.005 1.006 1.028 1.007 0.9981991 1.002 1.013 1.031 1.010 0.9991992 1.003 1.019 1.031 1.013 1.0001993 0.991 1.022 1.027 1.010 1.0031994 1.008 1.024 1.038 1.017 1.0091995 0.999 1.023 1.018 1.014 1.0061996 1.005 1.024 1.027 1.016 1.0081997 1.043 1.053 1.014 1.019 1.0081998 1.074 1.070 1.037 1.002 1.0151999 1.093 1.073 1.032 1.023 1.0382000 1.272 1.121 1.072 1.036 1.0362001 1.586 1.289 1.175 1.062 1.0662002 1.419 1.181 1.068 1.0692003 1.388 1.169 1.1162004 1.407 1.2142005 1.392

RESTATED TRIANGLE POST SDF ADJUSTMENTPY 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-ULT

% Cases affected 4.4% 12.5% 27.6% 44.3% 60.1% 74.9% 84.2% 90.3% 94.2% 96.6% 98.2% 99.1% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%1984 1.010 1.0511985 1.011 1.026 1.0511986 1.020 1.008 1.020 1.0511987 1.030 1.015 1.027 1.030 1.0511988 1.013 0.990 1.028 1.023 1.002 1.0511989 1.023 1.007 1.026 1.020 1.0101990 1.016 1.017 1.039 1.018 1.0091991 1.013 1.024 1.042 1.021 1.0101992 1.014 1.030 1.042 1.024 1.0111993 1.001 1.033 1.038 1.021 1.0141994 1.018 1.035 1.049 1.028 1.0201995 1.008 1.033 1.029 1.025 1.0171996 1.013 1.033 1.037 1.026 1.0191997 1.050 1.062 1.023 1.029 1.0181998 1.079 1.077 1.046 1.011 1.0251999 1.096 1.078 1.039 1.031 1.0482000 1.274 1.124 1.077 1.043 1.0452001 1.587 1.291 1.179 1.067 1.0732002 1.420 1.183 1.071 1.0742003 1.389 1.171 1.1192004 1.408 1.2162005 1.393

Original 1st to 19th 2.587 Original 19th to Ult 1.040 Total Dev Adjustment 1.177Restated 1st to 19th 3.010 Restated 19th to Ult 1.051 or 17.7%


Page 12


1.189 Impact Private Carriers: Policy Year Indemnity Paid + Case Development Exhibit D17.80% Target Impact 13.7% Sheet 9

ORIGINAL TRIANGLEPY 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-ULT

1993 1.0371994 1.005 1.0381995 1.004 1.003 1.0391996 1.004 1.002 1.003 1.0351997 1.004 1.001 1.004 1.004 1.0381998 1.004 1.004 1.003 1.005 0.9991999 1.003 1.006 1.004 1.001 1.0072000 1.005 1.007 1.002 1.001 1.0042001 1.004 1.004 0.998 1.010 1.0112002 1.017 1.009 1.007 1.004 1.0022003 1.012 1.012 1.006 1.006 1.0052004 1.025 1.012 1.006 0.993 1.0102005 1.025 1.013 1.008 1.006 1.0072006 1.028 1.016 1.008 1.005 1.0082007 1.044 1.011 1.010 1.007 1.0072008 1.047 1.025 1.008 1.003 1.0052009 1.116 1.037 1.013 1.007 1.0072010 1.220 1.093 1.035 1.011 1.0082011 1.512 1.203 1.091 1.066 1.0052012 1.493 1.189 1.056 1.0282013 1.495 1.165 1.0872014 1.448 1.1722015 1.407

5 Year Average 1.471 1.190 1.089 1.043 1.020 1.012 1.012 1.012 1.009 1.010 1.004 1.006 1.003 1.005 1.005 1.003 1.004 1.003 1.037


% Cases affected 4.4% 12.5% 27.6% 44.3% 60.1% 74.857% 84.2% 90.3% 94.2% 96.6% 98.2% 99.1% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%1993 1.0481994 1.016 1.0491995 1.015 1.014 1.0501996 1.015 1.013 1.014 1.0461997 1.015 1.012 1.015 1.015 1.0491998 1.015 1.015 1.014 1.016 1.0101999 1.014 1.017 1.015 1.012 1.0182000 1.016 1.018 1.013 1.012 1.0152001 1.015 1.015 1.009 1.021 1.0222002 1.028 1.020 1.018 1.015 1.0132003 1.022 1.023 1.017 1.017 1.0162004 1.035 1.022 1.017 1.004 1.0212005 1.034 1.023 1.018 1.017 1.0182006 1.035 1.024 1.017 1.014 1.0172007 1.045 1.012 1.011 1.008 1.0082008 1.047 1.025 1.008 1.003 1.0052009 1.116 1.037 1.013 1.007 1.0072010 1.220 1.093 1.035 1.011 1.0082011 1.512 1.203 1.091 1.066 1.0052012 1.493 1.189 1.056 1.0282013 1.495 1.165 1.0872014 1.448 1.1722015 1.407

5 Year Average 1.471 1.190 1.089 1.043 1.020 1.014 1.016 1.018 1.017 1.020 1.015 1.017 1.014 1.016 1.016 1.014 1.015 1.014 1.049


Adjustment 1.124 Adjustment 1.012Page 13

2008 SDF Adjustment

5.8% Percentage of claims assumed to be in the SDF October 2018 Loss Cost Revision1.185 Impact State Insurance Fund: Policy Year Paid +Case Development Exhibit D

17.80% Target Impact 17.9% Sheet 10ORIGINAL TRIANGLE

PY 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-ULT1984 1.006 1.0551985 1.003 1.002 1.0551986 1.001 1.003 1.007 1.0551987 1.004 1.005 1.006 1.007 1.0551988 1.003 1.002 1.007 1.007 1.005 1.0551989 1.011 1.012 1.003 1.010 1.0041990 1.000 1.004 1.007 1.011 1.0061991 0.993 1.004 1.008 1.010 1.0031992 0.995 1.007 1.009 1.013 1.0051993 0.990 1.003 1.009 1.007 1.0111994 0.988 1.001 1.008 1.006 1.0041995 0.979 1.006 0.998 1.009 1.0061996 0.973 0.992 1.017 1.004 0.9981997 0.989 0.996 1.027 1.002 1.0081998 1.006 0.986 0.999 0.988 0.9881999 1.050 1.018 0.988 1.009 1.0072000 1.196 1.068 0.998 1.023 0.9852001 1.557 1.294 1.068 0.985 0.9762002 1.699 1.282 1.054 1.0082003 1.632 1.243 1.0432004 1.709 1.2332005 1.548


% Cases affected 5.0% 18.4% 39.4% 59.4% 74.6% 85.6% 91.4% 94.8% 97.0% 98.4% 99.0% 99.4% 99.9% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%1984 1.017 1.0661985 1.014 1.013 1.0661986 1.012 1.014 1.018 1.0661987 1.014 1.016 1.017 1.017 1.0661988 1.014 1.013 1.018 1.018 1.015 1.0661989 1.022 1.023 1.014 1.020 1.0151990 1.010 1.015 1.018 1.021 1.0171991 1.003 1.014 1.019 1.021 1.0131992 1.005 1.017 1.020 1.024 1.0161993 1.000 1.014 1.019 1.017 1.0221994 0.998 1.011 1.019 1.017 1.0151995 0.989 1.016 1.008 1.020 1.0171996 0.982 1.002 1.027 1.014 1.0081997 0.997 1.005 1.037 1.012 1.0181998 1.012 0.994 1.008 0.998 0.9981999 1.054 1.024 0.996 1.018 1.0172000 1.198 1.073 1.004 1.031 0.9942001 1.558 1.297 1.073 0.991 0.9842002 1.700 1.285 1.058 1.0142003 1.633 1.245 1.0472004 1.710 1.2352005 1.549



Page 14


1.185 Impact State Insurance Fund Policy Year Indemnity Paid + Case Development Exhibit D17.80% Target Impact 13.6% Sheet 11

ORIGINAL TRIANGLEPY 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-11 11-12* 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-ULT

1993 1.0761994 1.009 1.0811995 1.009 1.010 1.0751996 1.011 1.012 1.003 1.0771997 1.009 1.010 1.007 1.007 1.0771998 1.009 1.009 1.006 1.010 1.0081999 1.026 1.013 1.003 1.006 1.0082000 1.009 1.007 1.006 1.011 1.0112001 1.082 1.011 1.002 1.006 1.0052002 1.010 1.006 1.004 1.007 1.0082003 0.999 1.021 1.002 1.011 1.0042004 0.999 1.010 1.004 0.998 1.0082005 1.005 1.004 1.004 1.011 1.0072006 0.994 1.002 1.000 1.011 1.0102007 1.017 1.002 0.991 0.996 0.9952008 1.025 1.018 0.996 1.008 1.0032009 1.091 1.027 1.007 1.007 1.0022010 1.217 1.073 1.025 1.001 0.9992011 1.497 1.192 1.044 1.038 1.0072012 1.433 1.188 1.093 1.0522013 1.448 1.235 1.0822014 1.472 1.2192015 1.432

5 Year Average 1.456 1.210 1.077 1.033 1.010 1.000 1.002 1.000 1.004 1.011 1.005 1.009 1.009 1.008 1.007 1.009 1.009 1.007 1.077

RESTATED TRIANGLE POST SDF ADJUSTMENTPY 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-11 11-12* 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-ULT

% Cases affected 5.0% 18.4% 39.4% 59.4% 74.6% 85.6% 91.4% 94.8% 97.0% 98.4% 99.0% 99.4% 99.9% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%1993 1.0881994 1.020 1.0931995 1.020 1.021 1.0871996 1.022 1.023 1.014 1.0891997 1.020 1.021 1.018 1.018 1.0891998 1.020 1.020 1.017 1.021 1.0191999 1.037 1.024 1.014 1.017 1.0192000 1.020 1.018 1.017 1.022 1.0222001 1.093 1.022 1.013 1.017 1.0162002 1.021 1.017 1.015 1.018 1.0192003 1.009 1.032 1.013 1.022 1.0152004 1.009 1.021 1.015 1.009 1.0192005 1.015 1.014 1.014 1.022 1.0182006 1.002 1.011 1.009 1.020 1.0192007 1.018 1.003 0.992 0.997 0.9962008 1.025 1.018 0.996 1.008 1.0032009 1.091 1.027 1.007 1.007 1.0022010 1.217 1.073 1.025 1.001 0.9992011 1.497 1.192 1.044 1.038 1.0072012 1.433 1.188 1.093 1.0522013 1.448 1.235 1.0822014 1.472 1.2192015 1.432

5 Year Average 1.456 1.210 1.077 1.033 1.010 1.001 1.006 1.007 1.012 1.022 1.016 1.019 1.020 1.019 1.018 1.020 1.020 1.018 1.089



* Mid 3 of 5 Year average for the 11th-12th

Page 15

October 2018 Loss Cost RevisionExhibit DSheet 12

Original Estimated Impact 6.3%

After Development Adjustment Procedure:Weight Indemnity Medical

Private Carriers 60% 5.1% 5.4%State Insurance Fund 40% 5.6% 5.4%

Total Re-opened Case Fund Impact 5.3% 5.4%Last Year Impact 5.7% 5.9%

Derivation of Re-opened Case Fund Adjustment


Page 16

2015 Re-opened Case Fund Adjustment6.3% Percentage of losses assumed to be in the Re-opened Case Fund October 2018 Loss Cost Revision

1.0868 Impact Private Carriers: Policy Year Indemnity Paid+Case Development Exhibit D6.3% Target Impact 6.3% Sheet 13


1990 1.008 1.0291991 1.002 1.005 1.0291992 1.009 1.006 1.004 1.0291993 1.006 1.004 1.002 1.001 1.0291994 1.010 1.004 1.004 1.004 1.004 1.0291995 1.004 1.005 1.004 1.003 1.0031996 1.009 1.005 1.005 1.003 1.0021997 1.009 1.004 1.005 1.003 1.0011998 1.001 1.004 1.002 1.002 1.0041999 1.002 1.005 1.007 1.003 1.0062000 1.018 1.008 1.007 1.005 1.0082001 1.029 1.015 1.018 1.003 1.0062002 1.024 1.011 1.020 1.015 1.0092003 1.034 1.018 1.024 1.010 1.0132004 1.071 1.040 1.021 1.027 1.0112005 1.077 1.038 1.028 1.021 1.0132006 1.113 1.058 1.068 1.026 1.0172007 1.226 1.109 1.050 1.037 1.0112008 1.451 1.249 1.114 1.043 1.0232009 1.526 1.200 1.115 1.0352010 1.509 1.219 1.0892011 1.513 1.2072012 1.495

5 Year Average 1.499 1.220 1.108 1.053 1.047 1.028 1.020 1.021 1.015 1.011 1.005 1.006 1.005 1.004 1.005 1.004 1.004 1.003 1.004 1.029

RESTATED TRIANGLE POST RE-OPENED CASE FUND ADJUSTMENTPY 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 20-ULT

% Losses affected 25.0% 45.0% 60.0% 70.0% 78.0% 83.0% 86.0% 88.0% 89.5% 91.0% 92.0% 93.0% 94.0% 100.0%1990 1.013 1.0351991 1.007 1.010 1.0351992 1.014 1.011 1.009 1.0351993 1.011 1.009 1.007 1.006 1.0351994 1.015 1.009 1.009 1.009 1.009 1.0351995 1.009 1.010 1.009 1.008 1.0081996 1.014 1.010 1.010 1.008 1.0071997 1.014 1.009 1.010 1.008 1.0061998 1.005 1.009 1.007 1.007 1.0091999 1.006 1.009 1.012 1.008 1.0112000 1.021 1.012 1.011 1.010 1.0132001 1.032 1.018 1.022 1.007 1.0112002 1.025 1.013 1.023 1.019 1.0132003 1.034 1.019 1.027 1.013 1.0172004 1.071 1.040 1.022 1.030 1.0142005 1.077 1.038 1.028 1.022 1.0152006 1.113 1.058 1.068 1.026 1.0182007 1.226 1.109 1.050 1.037 1.0112008 1.451 1.249 1.114 1.043 1.0232009 1.526 1.200 1.115 1.0352010 1.509 1.219 1.0892011 1.513 1.2072012 1.495

5 Year Average 1.499 1.220 1.108 1.053 1.047 1.028 1.021 1.023 1.018 1.015 1.009 1.011 1.010 1.009 1.010 1.009 1.009 1.009 1.010 1.035


Adjustment 1.057 Adjustment 1.006 Page 17

2018 Re-opened Case Fund Adjustment6.3% Percentage of Losses assumed to be in the Fund October 2018 Loss Cost Revision

1.0868 Impact Private Carriers: Policy Year Indemnity Paid + Case Development Exhibit D6.3% Target Impact 5.1% Sheet 14


1993 1.003 1.0341994 1.005 1.004 1.0341995 1.004 1.003 1.005 1.0341996 1.004 1.002 1.003 1.001 1.0341997 1.004 1.001 1.004 1.004 1.004 1.0341998 1.004 1.004 1.003 1.005 0.9991999 1.003 1.006 1.004 1.001 1.0072000 1.005 1.007 1.002 1.001 1.0042001 1.004 1.004 0.998 1.010 1.0112002 1.017 1.009 1.007 1.004 1.0022003 1.012 1.012 1.006 1.006 1.0052004 1.025 1.012 1.006 0.993 1.0102005 1.025 1.013 1.008 1.006 1.0072006 1.028 1.016 1.008 1.005 1.0082007 1.044 1.011 1.010 1.007 1.0072008 1.047 1.025 1.008 1.003 1.0052009 1.116 1.037 1.013 1.007 1.0072010 1.220 1.093 1.035 1.011 1.0082011 1.512 1.203 1.091 1.066 1.0052012 1.493 1.189 1.056 1.0282013 1.495 1.165 1.0872014 1.448 1.1722015 1.407

5 Year Average 1.471 1.190 1.089 1.043 1.020 1.012 1.012 1.012 1.009 1.010 1.004 1.006 1.003 1.005 1.005 1.003 1.004 1.003 1.003 1.034

RESTATED TRIANGLE POST RE-OPENED CASE FUNDPY 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 20-ULT

% Losses affected 25.0% 45.0% 60.0% 70.0% 78.0% 83.0% 86.0% 88.0% 89.5% 91.0% 92.0% 93.0% 94.0% 100.0%1993 1.008 1.0401994 1.010 1.009 1.0391995 1.009 1.008 1.010 1.0391996 1.009 1.007 1.008 1.006 1.0391997 1.009 1.006 1.009 1.009 1.009 1.0391998 1.009 1.009 1.008 1.010 1.0041999 1.008 1.011 1.009 1.006 1.0122000 1.010 1.012 1.007 1.006 1.0092001 1.008 1.008 1.002 1.014 1.0152002 1.021 1.013 1.011 1.008 1.0062003 1.015 1.015 1.010 1.010 1.0082004 1.028 1.015 1.009 0.996 1.0132005 1.026 1.015 1.010 1.008 1.0092006 1.028 1.017 1.009 1.006 1.0092007 1.044 1.011 1.010 1.007 1.0072008 1.047 1.025 1.008 1.003 1.0052009 1.116 1.037 1.013 1.007 1.0072010 1.220 1.093 1.035 1.011 1.0082011 1.512 1.203 1.091 1.066 1.0052012 1.493 1.189 1.056 1.0282013 1.495 1.165 1.0872014 1.448 1.1722015 1.407

5 Year Average 1.471 1.190 1.089 1.043 1.020 1.012 1.013 1.013 1.011 1.012 1.007 1.010 1.008 1.009 1.009 1.007 1.009 1.008 1.008 1.039




1.0886 Impact Private Carriers: Policy Year Medical Paid+Case Development Exhibit D6.3% Target Impact 6.3% Sheet 15


1990 1.001 1.0561991 0.999 1.003 1.0561992 1.011 1.017 1.009 1.0561993 1.000 0.999 1.000 0.998 1.0561994 1.011 1.004 1.006 1.003 1.000 1.0561995 0.996 1.003 1.011 1.006 1.0051996 1.002 1.001 0.997 1.005 1.0021997 1.007 1.018 1.001 1.004 1.0111998 1.003 1.019 1.005 1.014 0.9971999 1.012 1.026 1.016 1.014 1.0152000 1.018 1.029 1.016 1.015 1.0072001 1.025 1.015 1.031 1.008 1.0172002 1.030 1.017 1.029 1.018 1.0142003 1.028 1.014 1.018 1.006 1.0212004 1.044 1.034 1.026 1.036 1.0222005 1.072 1.036 1.030 1.034 1.0192006 1.109 1.054 1.041 1.039 1.0262007 1.177 1.070 1.058 1.051 1.0402008 1.225 1.161 1.083 1.048 1.0402009 1.224 1.145 1.095 1.0562010 1.255 1.126 1.0682011 1.221 1.1382012 1.200

5 Year Average 1.225 1.149 1.085 1.058 1.042 1.034 1.026 1.023 1.018 1.022 1.013 1.015 1.009 1.005 1.002 1.006 1.005 1.005 1.002 1.056


% Losses affected 25.0% 45.0% 60.0% 70.0% 78.0% 83.0% 86.0% 88.0% 89.5% 91.0% 92.0% 93.0% 94.0% 100.0%1990 1.006 1.0621991 1.004 1.008 1.0621992 1.016 1.022 1.014 1.0621993 1.005 1.004 1.005 1.003 1.0621994 1.016 1.009 1.011 1.008 1.005 1.0621995 1.001 1.008 1.016 1.011 1.0101996 1.007 1.006 1.002 1.010 1.0071997 1.012 1.023 1.006 1.009 1.0161998 1.007 1.024 1.010 1.019 1.0021999 1.016 1.030 1.021 1.019 1.0202000 1.021 1.033 1.020 1.020 1.0122001 1.028 1.018 1.035 1.012 1.0222002 1.031 1.020 1.032 1.022 1.0182003 1.028 1.015 1.021 1.009 1.0252004 1.044 1.034 1.027 1.039 1.0252005 1.072 1.036 1.030 1.035 1.0222006 1.109 1.054 1.041 1.039 1.0272007 1.177 1.070 1.058 1.051 1.0402008 1.225 1.161 1.083 1.048 1.0402009 1.224 1.145 1.095 1.0562010 1.255 1.126 1.0682011 1.221 1.1382012 1.200

5 Year Average 1.225 1.149 1.085 1.058 1.042 1.034 1.027 1.026 1.021 1.026 1.018 1.020 1.014 1.010 1.007 1.011 1.010 1.010 1.007 1.062



2018 Re-opened Case Fund Adjustment6.3% Percentage of losses assumed to be in the Fund October 2018 Loss Cost Revision

1.0886 Impact Private Carriers: Policy Year Medical Paid + Case Development Exhibit D6.3% Target Impact 5.4% Sheet 16


1993 1.000 1.0531994 1.003 1.000 1.0531995 1.006 1.005 1.008 1.0531996 1.005 1.002 1.001 0.999 1.0531997 1.004 1.011 1.001 0.999 0.998 1.0531998 1.014 0.997 1.012 0.993 1.0081999 1.014 1.015 1.001 0.998 0.9942000 1.015 1.006 1.005 0.993 1.0032001 1.008 1.015 1.002 1.001 1.0242002 1.018 1.015 0.997 1.008 1.0082003 1.007 1.020 0.999 1.010 1.0372004 1.034 1.022 1.011 1.008 1.0072005 1.035 1.019 1.011 1.011 1.0132006 1.040 1.026 1.007 1.005 1.0102007 1.051 1.040 1.002 1.000 1.0102008 1.048 1.041 1.021 1.008 1.0022009 1.095 1.057 1.029 1.011 1.0042010 1.126 1.068 1.037 1.012 1.0142011 1.221 1.132 1.074 1.026 1.0032012 1.199 1.091 1.056 1.0192013 1.200 1.112 1.0772014 1.171 1.1092015 1.169

5 Year Average 1.192 1.114 1.074 1.037 1.027 1.025 1.015 1.012 1.011 1.014 1.009 1.009 1.013 1.009 1.004 1.006 0.999 1.003 1.001 1.053


% Losses affected 25.0% 45.0% 60.0% 70.0% 78.0% 83.0% 86.0% 88.0% 89.5% 91.0% 92.0% 93.0% 94.0% 100.0%1993 1.005 1.0591994 1.008 1.005 1.0591995 1.011 1.010 1.013 1.0591996 1.010 1.007 1.006 1.004 1.0591997 1.009 1.016 1.006 1.004 1.003 1.0591998 1.019 1.002 1.017 0.998 1.0131999 1.019 1.020 1.006 1.003 0.9992000 1.020 1.011 1.010 0.998 1.0082001 1.012 1.019 1.006 1.005 1.0292002 1.022 1.019 1.001 1.012 1.0122003 1.010 1.024 1.003 1.014 1.0412004 1.037 1.025 1.014 1.011 1.0102005 1.036 1.021 1.013 1.013 1.0152006 1.040 1.027 1.008 1.006 1.0112007 1.051 1.040 1.002 1.000 1.0102008 1.048 1.041 1.021 1.008 1.0022009 1.095 1.057 1.029 1.011 1.0042010 1.126 1.068 1.037 1.012 1.0142011 1.221 1.132 1.074 1.026 1.0032012 1.199 1.091 1.056 1.0192013 1.200 1.112 1.0772014 1.171 1.1092015 1.169

5 Year Average 1.192 1.114 1.074 1.037 1.027 1.025 1.015 1.013 1.013 1.017 1.012 1.013 1.018 1.013 1.009 1.011 1.004 1.008 1.006 1.059




1.0886 Impact State Insurance Fund: Policy Year Indemnity Paid+Case Development Exhibit D6.3% Target Impact 6.3% Sheet 17

ORIGINAL TRIANGLEPY 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-11 11-12* 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 20-ULT

19901991 1.007 1.007 1.0701992 1.008 1.004 1.007 1.0701993 1.006 1.011 1.008 1.008 1.0701994 1.002 1.010 1.005 1.009 1.006 1.0701995 1.012 1.007 1.004 1.009 1.010 1.010 1.0701996 1.010 1.013 1.012 1.011 1.0121997 1.010 1.010 1.007 1.009 1.0101998 1.005 1.009 1.007 1.009 1.0091999 1.008 1.009 1.008 1.026 1.0132000 1.001 1.004 1.010 1.009 1.0072001 0.970 1.009 1.003 1.082 1.0112002 0.979 1.006 1.011 1.010 1.0062003 1.006 1.001 1.001 0.999 1.0212004 1.002 0.993 0.995 0.999 1.0102005 1.017 1.008 0.998 1.005 1.0042006 1.046 1.013 1.047 0.994 1.0022007 1.278 1.114 1.054 1.017 1.0022008 1.432 1.275 1.085 1.025 1.0182009 1.511 1.225 1.091 1.0272010 1.424 1.217 1.0732011 1.497 1.1922012 1.433

5 Year Average 1.459 1.237 1.082 1.027 1.018 0.999 0.996 0.996 1.006 1.009 1.008 1.010 1.012 1.011 1.008 1.008 1.009 1.008 1.008 1.070

RESTATED TRIANGLE POST RE-OPENED CASE FUND ADJUSTMENTPY 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10 10-11 11-12* 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 20-ULT

% Losses affected 25.0% 45.0% 60.0% 70.0% 78.0% 83.0% 86.0% 88.0% 89.5% 91.0% 92.0% 93.0% 94.0% 100.0%19901991 1.012 1.012 1.0761992 1.013 1.009 1.012 1.0761993 1.011 1.017 1.013 1.013 1.0761994 1.007 1.015 1.010 1.014 1.011 1.0761995 1.016 1.012 1.010 1.014 1.015 1.015 1.0761996 1.015 1.018 1.017 1.017 1.0171997 1.015 1.015 1.012 1.014 1.0151998 1.009 1.014 1.012 1.014 1.0141999 1.012 1.014 1.013 1.031 1.0182000 1.004 1.008 1.014 1.014 1.0122001 0.972 1.012 1.007 1.087 1.0162002 0.980 1.009 1.014 1.014 1.0102003 1.006 1.002 1.004 1.002 1.0252004 1.002 0.993 0.996 1.002 1.0132005 1.017 1.008 0.998 1.006 1.0072006 1.046 1.013 1.047 0.994 1.0032007 1.278 1.114 1.054 1.017 1.0022008 1.432 1.275 1.085 1.025 1.0182009 1.511 1.225 1.091 1.0272010 1.424 1.217 1.0732011 1.497 1.1922012 1.433

5 Year Average 1.459 1.237 1.082 1.027 1.018 0.999 0.998 0.999 1.009 1.013 1.013 1.014 1.017 1.016 1.013 1.013 1.014 1.013 1.013 1.076



* Mid 3 of 5 year average for the 11th - 12th

Page 21

2018 Re-opened Case Fund Adjustment6.3% Percentage of Losses assumed to be in the Fund October 2018 Loss Cost Revision

1.0886 Impact State Insurance Fund: Policy Year Indemnity Paid + Case Development Exhibit D6.3% Target Impact 5.6% Sheet 18


1993 1.006 1.071994 1.009 1.010 1.071995 1.009 1.010 1.005 1.071996 1.011 1.012 1.003 1.007 1.071997 1.009 1.010 1.007 1.007 1.007 1.071998 1.009 1.009 1.006 1.010 1.0081999 1.026 1.013 1.003 1.006 1.0082000 1.009 1.007 1.006 1.011 1.0112001 1.082 1.011 1.002 1.006 1.0052002 1.010 1.006 1.004 1.007 1.0082003 0.999 1.021 1.002 1.011 1.0042004 0.999 1.010 1.004 0.998 1.0082005 1.005 1.004 1.004 1.011 1.0072006 0.994 1.002 1.000 1.011 1.0102007 1.017 1.002 0.991 0.996 0.9952008 1.025 1.018 0.996 1.008 1.0032009 1.091 1.027 1.007 1.007 1.0022010 1.217 1.073 1.025 1.001 0.9992011 1.497 1.192 1.044 1.038 1.0072012 1.433 1.188 1.093 1.0522013 1.448 1.235 1.0822014 1.472 1.2192015 1.432

5 Year Average 1.456 1.210 1.077 1.033 1.010 1.000 1.002 1.000 1.004 1.011 1.019 1.009 1.009 1.008 1.007 1.009 1.009 1.007 1.007 1.070


% Losses affected 25.0% 45.0% 60.0% 70.0% 78.0% 83.0% 86.0% 88.0% 89.5% 91.0% 92.0% 93.0% 94.0% 100.0%1993 1.011 1.0761994 1.014 1.015 1.0761995 1.014 1.015 1.010 1.0761996 1.016 1.017 1.008 1.012 1.0761997 1.014 1.015 1.012 1.012 1.012 1.0761998 1.014 1.014 1.011 1.015 1.0131999 1.031 1.018 1.008 1.011 1.0132000 1.014 1.012 1.011 1.016 1.0162001 1.087 1.015 1.006 1.010 1.0092002 1.014 1.010 1.008 1.011 1.0122003 1.002 1.025 1.006 1.015 1.0082004 1.002 1.013 1.007 1.001 1.0112005 1.006 1.006 1.006 1.013 1.0092006 0.994 1.003 1.001 1.012 1.0112007 1.017 1.002 0.991 0.996 0.9952008 1.025 1.018 0.996 1.008 1.0032009 1.091 1.027 1.007 1.007 1.0022010 1.217 1.073 1.025 1.001 0.9992011 1.497 1.192 1.044 1.038 1.0072012 1.433 1.188 1.093 1.0522013 1.448 1.235 1.0822014 1.472 1.2192015 1.432

5 Year Average 1.456 1.210 1.077 1.033 1.010 1.000 1.002 1.001 1.006 1.014 1.022 1.013 1.014 1.013 1.012 1.014 1.014 1.013 1.012 1.076




1.0895 Impact State Insurance Fund: Policy Year Medical Paid+Case Development Exhibit D6.3% Target Impact 6.3% Sheet 19


1990 0.999 1.0671991 1.017 0.996 1.0671992 1.010 1.012 1.013 1.0671993 1.000 1.010 1.006 1.011 1.0671994 1.014 1.010 1.009 1.026 0.997 1.0671995 1.006 1.013 1.020 1.010 1.0081996 1.006 1.036 0.994 1.009 1.0101997 1.008 1.018 1.013 1.015 1.0041998 1.006 1.012 1.015 1.013 1.0141999 1.020 1.017 1.010 1.006 1.0202000 1.027 0.998 1.016 1.010 1.0082001 1.027 1.025 1.025 1.037 1.0072002 1.056 1.002 1.025 1.019 1.0142003 1.017 1.051 0.993 1.026 1.0142004 1.025 1.030 1.009 1.007 1.0082005 1.043 1.056 1.014 1.041 1.0042006 1.095 1.064 1.020 1.016 0.9962007 1.117 1.094 1.041 1.016 1.0192008 1.234 1.147 1.091 1.022 1.0162009 1.285 1.137 1.067 1.0222010 1.211 1.091 1.0342011 1.225 1.0922012 1.172

5 Year Average 1.225 1.117 1.076 1.038 1.027 1.019 1.031 1.007 1.022 1.015 1.018 1.009 1.011 1.018 1.010 1.009 1.010 1.014 1.003 1.067


% Losses affected 25.0% 45.0% 60.0% 70.0% 78.0% 83.0% 86.0% 88.0% 89.5% 91.0% 92.0% 93.0% 94.0% 100.0%1990 1.004 1.0731991 1.022 1.001 1.0731992 1.015 1.017 1.018 1.0731993 1.005 1.015 1.011 1.016 1.0731994 1.019 1.015 1.014 1.031 1.002 1.0731995 1.011 1.018 1.025 1.015 1.0131996 1.011 1.041 0.999 1.014 1.0151997 1.013 1.023 1.018 1.020 1.0091998 1.010 1.017 1.020 1.018 1.0191999 1.024 1.021 1.015 1.011 1.0252000 1.030 1.002 1.020 1.015 1.0132001 1.030 1.028 1.029 1.042 1.0122002 1.057 1.005 1.028 1.023 1.0182003 1.017 1.052 0.996 1.029 1.0182004 1.025 1.030 1.010 1.010 1.0112005 1.043 1.056 1.014 1.042 1.0072006 1.095 1.064 1.020 1.016 0.9972007 1.117 1.094 1.041 1.016 1.0192008 1.234 1.147 1.091 1.022 1.0162009 1.285 1.137 1.067 1.0222010 1.211 1.091 1.0342011 1.225 1.0922012 1.172

5 Year Average 1.225 1.117 1.076 1.038 1.027 1.019 1.032 1.009 1.026 1.019 1.022 1.014 1.016 1.023 1.015 1.014 1.015 1.019 1.009 1.073



2018 Re-opened Case Fund Adjustment6.3% Percentage of losses assumed to be in the Fund October 2018 Loss Cost Revision

1.0895 Impact State Insurance Fund: Policy Year Medical Paid + Case Development Exhibit D6.3% Target Impact 5.4% Sheet 20


1993 1.011 1.0721994 1.026 0.997 1.0721995 1.010 1.008 1.009 1.0721996 1.009 1.010 1.025 0.993 1.0721997 1.015 1.004 1.013 1.010 0.999 1.0721998 1.013 1.014 1.007 1.018 1.0101999 1.006 1.020 1.011 1.009 1.0052000 1.010 1.008 1.006 1.011 1.0012001 1.037 1.007 0.996 0.985 1.0062002 1.019 1.014 1.015 1.002 1.0062003 1.026 1.014 1.016 1.014 0.9982004 1.007 1.008 1.012 1.019 0.9932005 1.041 1.004 1.009 1.008 1.0142006 1.016 0.996 1.013 1.009 1.0132007 1.016 1.019 1.006 1.010 1.0092008 1.022 1.016 1.001 1.004 1.0242009 1.067 1.022 1.002 1.008 1.0172010 1.091 1.034 1.005 1.016 1.0132011 1.225 1.092 1.030 1.020 1.0162012 1.172 1.055 1.046 1.0102013 1.129 1.105 1.0652014 1.165 1.0632015 1.201

5 Year Average 1.178 1.081 1.048 1.016 1.013 1.011 1.013 1.012 1.012 1.013 1.020 1.008 1.002 1.006 1.011 1.006 1.011 1.016 1.002 1.072


% Losses affected 25.0% 45.0% 60.0% 70.0% 78.0% 83.0% 86.0% 88.0% 89.5% 91.0% 92.0% 93.0% 94.0% 100.0%1993 1.016 1.0781994 1.031 1.002 1.0781995 1.015 1.013 1.014 1.0781996 1.014 1.015 1.030 0.998 1.0781997 1.020 1.009 1.018 1.015 1.004 1.0781998 1.018 1.019 1.012 1.023 1.0151999 1.011 1.025 1.016 1.014 1.0102000 1.015 1.013 1.011 1.016 1.0062001 1.042 1.011 1.000 0.989 1.0102002 1.023 1.018 1.019 1.006 1.0102003 1.029 1.018 1.020 1.018 1.0022004 1.010 1.011 1.015 1.022 0.9962005 1.042 1.006 1.011 1.010 1.0162006 1.016 0.997 1.014 1.010 1.0142007 1.016 1.019 1.006 1.010 1.0092008 1.022 1.016 1.001 1.004 1.0242009 1.067 1.022 1.002 1.008 1.0172010 1.091 1.034 1.005 1.016 1.0132011 1.225 1.092 1.030 1.020 1.0162012 1.172 1.055 1.046 1.0102013 1.129 1.105 1.0652014 1.165 1.0632015 1.201

5 Year Average 1.178 1.081 1.048 1.016 1.013 1.011 1.013 1.013 1.014 1.016 1.023 1.012 1.006 1.011 1.016 1.011 1.016 1.021 1.007 1.078



October 2018 Loss Cost Revision Exhibit E

(A) Annual Loss Trend (See Exhibit EE)

(1) Selected Indemnity Claim Cost Trend 1.032

(2) Selected Indemnity Claim Frequency Trend 0.996

(3) Indemnity Loss Trend [(1) x (2)] 1.028

(4) Selected Medical Claim Cost Trend 1.005

(5) Selected Medical Claim Frequency Trend 0.996

(6) Medical Loss Trend [(4) x (5)] 1.001

(7) Indemnity Weight* 0.650

(8) Medical Weight* 0.350

(9) Indicated Annual Loss Trend [(3)x(7) + (6)x(8)] 1.019

(B) Annual Wage Trend 1.030

(C) Annual Loss/Wage Trend (A9) / (B) 0.989

(D) Trended to Average Accident Date (C)^3.25 0.965

(E) Final Indicated Loss/Wage Trend Factor 0.965

(F) Selected Loss/Wage Trend Factor 0.965

* Policy Year 2016 Adjusted Ultimate Losses - See Exhibit B

Average Annual Change


Determination of Trend Factor

Page 25

October 2018 Loss Cost Revision Exhibit F

Paid DCCE Ultimate Paid DCCE Paid DCCE Ultimate Paid. DCCEPY DCCE Factor to Ult. DCCE @ Ult Indem.+ Med. Loss * Ratio to Loss AY DCCE Factor to Ult. DCCE @ Ult Indem.+ Med. Loss * Ratio to Loss

2002 55,541,750 1.095 60,818,216 712,648,469 0.085 2003 79,569,866 1.116 88,799,970 978,247,440 0.0912003 82,048,326 1.125 92,304,367 998,681,189 0.092 2004 81,200,904 1.144 92,893,834 982,315,670 0.0952004 79,494,680 1.151 91,498,377 969,286,767 0.094 2005 79,676,436 1.170 93,221,430 981,456,159 0.0952005 84,793,232 1.176 99,716,841 1,014,982,690 0.098 2006 91,948,062 1.202 110,521,571 1,066,147,288 0.1042006 94,219,101 1.208 113,816,674 1,166,030,995 0.098 2007 102,005,562 1.236 126,078,875 1,478,133,877 0.0852007 108,780,329 1.242 135,105,169 1,668,778,498 0.081 2008 110,438,171 1.273 140,587,792 1,755,689,658 0.0802008 118,444,586 1.282 151,845,959 1,882,673,808 0.081 2009 120,861,300 1.312 158,570,026 1,861,700,380 0.0852009 117,832,440 1.324 156,010,151 1,827,446,142 0.085 2010 119,266,235 1.359 162,082,813 1,859,846,267 0.0872010 117,764,994 1.376 162,044,632 1,872,307,220 0.087 2011 115,201,845 1.417 163,241,014 1,857,862,788 0.0882011 111,536,962 1.441 160,724,762 1,816,862,409 0.088 2012 101,617,415 1.494 151,816,418 1,622,501,694 0.0942012 97,220,297 1.532 148,941,495 1,519,184,743 0.098 2013 93,966,979 1.606 150,910,968 1,497,489,007 0.1012013 92,937,238 1.674 155,576,936 1,538,969,671 0.101 2014 89,831,619 1.804 162,056,241 1,516,469,109 0.1072014 87,269,148 1.950 170,174,839 1,565,500,120 0.109 2015 80,242,509 2.223 178,379,098 1,634,110,609 0.1092015 68,404,928 2.555 174,774,591 1,628,991,969 0.107 2016 55,111,955 3.270 180,216,093 1,692,437,228 0.1062016 41,501,662 4.550 188,832,562 1,775,023,507 0.106 2017 19,250,466 10.359 199,415,577 1,818,694,377 0.110

Source: New York Financial Data Calls Source: New York Financial Data Calls* Indemnity losses are adjusted to the current benefit level. All Year Average 0.094 * Indemnity losses are adjusted to the current benefit level. All Year Average 0.096

Average 2012-2016 0.104 Average 2013-2017 0.107

Average 2014-2016 0.107 Average 2015-2017 0.108

Adjustments for Excluding the Large Deductibles Inc. AOECY Incurred Losses AOE Incurred Adj. to AOE Adj. to Loss Ratio to Loss *

(1) (2) (3) (4) (5)

2003 20,131,432,000 1,503,135,000 0.007 0.64 0.0522004 21,158,156,700 1,891,204,800 0.004 0.64 0.0602005 21,516,206,058 1,986,173,553 0.007 0.65 0.0652006 19,786,622,352 1,948,192,140 0.008 0.65 0.0692007 18,513,969,963 1,746,118,572 0.009 0.65 0.0672008 22,161,623,000 1,960,693,000 0.008 0.67 0.0652009 17,604,683,000 1,936,449,000 0.008 0.67 0.0792010 20,487,721,000 1,858,147,000 0.007 0.68 0.0662011 20,603,656,000 1,768,629,000 0.005 0.69 0.0632012 22,434,533,000 1,607,421,000 0.005 0.69 0.0532013 21,177,827,000 1,897,021,000 0.004 0.70 0.0662014 20,594,756,000 1,735,275,000 0.005 0.70 0.0622015 20,712,902,000 1,752,545,000 0.005 0.70 0.0632016 20,110,050,000 1,915,488,000 0.005 0.70 0.0702017 18,800,424,092 1,780,633,373 0.004 0.70 0.069

Source: Insurance Expense Exhibit* (5) = {(2)/(1)+(3)} x (4) All Year Average 0.065

5 Year Average 0.066

3 Year Average 0.067

Final DCCE 0.108(3 yr avg PY & AY)Final AOE 0.066

Total LAE 0.174

Current LAE 0.161

Change in LAE 1.011


Loss Adjustment Expense Analysis (Private Carrier Experience)

Adjusting and Other Expenses Incurred

Paid Defense & Cost Containment Expense by Policy Year @12/17 Paid Defense & Cost Containment Expense by Accident Year @12/17

Page 26

October 2018 Loss Cost RevisionExhibit G

Sheet 1

ProposedDate Max. Benefit Actual % Cumulative Impact Filing Impact(1) (2) (3) (4) (6)

[(4)-1]x(5)

July 1, 2018 $905 0.7% 1.007 0.2%

July 1, 2019 $927 0.4% 1.011 0.8%July 1, 2020 $962 0.7% 1.018 0.1%

1.1%

Weight in Filing Effective Period

(5)

0.281

0.6880.031

Total Filing Impact


Proposed Maximum Weekly Benefit Changes

Estimated Increase in Cost

Page 27


Sheet 2

(1) Impact on Physician cost 22.9%

(2) Physician costs as a percentage of Medical costs * 43.7%

(3) Impact of Medical costs (1) x (2) 10.0%

(4) Percentage of Medical costs out of Total Loss Costs ** 35.0%

(5) Overall Impact of Loss Costs (3) x (4) 3.5%

* Based on Medical Call Data

** Based on NY Financial Call data

Workers Compensation - New York

Medical Fee Schedule

Increase Effective 10/1/2018

Page 28


Sheet 3

Arm Leg Other

(1) Average impairment under prior guidelines 34.8% 30.9% 33.2%

(2) Shoulder / Knee as a percentage of Arm / Leg 72.3% 76.8% -

(3) Percentage of SLU awards of Shoulder / Knee claims with surgeries 93.8% 75.9% -

(4) Percentage of SLU awards of Shoulder / Knee claims with surgeries receiving the add-on 90.0% 90.0% -

(5) Percentage of Arm / Leg claims receiving add-on (=(2)x(3)x(4)) 61.0% 52.5%

(6) New average impairment 28.8% 26.6% 33.2%

(7) Impact on SLU awards (=(6) / (1)-1) -17.2% -14.0% 0.0%

(8) SLU award distribution 49.5% 26.5% 24.0%

(9) Overall impact to SLU awards (7) x (8) -12.3%


Determination of Impact on SLU Awards


Page 29


Sheet 4

-12.3%

82.0%

-10.1%

60.0%

-6.0%

72.4%

-4.4%

65.0%

(1) Impact to SLU awards

(2) SLU awards out of total SLU Indemnity costs *

(3) Impact on SLU Indemnity costs (1) x (2)

(4) SLU indemnity costs out of total Permanent Partial (PP) indemnity costs *

(5) Impact on Permanent Partial indemnity costs (3) x (4)

(6) PP Indemnity costs out of Total Indemnity costs **

(7) Impact on indemnity costs (5) x (6)

(8) Indemnity out of Total ***

(9) Overall Loss Cost Impact (7) x (8) -2.8%

* Based on WCB data

** Based on NY Unit Statistical Reporting

***Based on NY Financial Call data


Revised Impairment Guidelines for Scheduled-Loss-of-Use Claims


Page 30


Sheet 5

1.011A. Maximum Weekly Benefit (Exhibit G, Sheet 1)

B. Revised Medical Fee Schedule (Exhibit G, Sheet 2) 1.035

C.0.972

D. 1.017


Statutory Benefits and Regulatory Change Summary*

Revised Impairment Guidelines for Scheduled-Loss-of-Use Claims (Exhibit G, Sheet 4)

Total Loss Cost Impact

Page 31

These changes do not include savings from certain components of the 2017 reform which are accounted for as part of the loss on-level factors. See Exhibit D and the Explanatory Memorandum for additional information.

*

October 2018 Loss Cost Revision

Exhibit H


Terrorism and Catastrophe Charges

In the October 1, 2015 loss cost filing, the charge for terrorism was changed to reflect the higher

carrier retentions required by the enactment of the Terrorism Risk Insurance Program Reauthorization

Act of 2015 (TRIPRA). The charge for natural disasters and catastrophic industrial accidents was last

updated as part of the 2008 Loss Cost revision.

In this filing, no changes to these catastrophe charges are being proposed. Consequently, the

currently approved loss cost for terrorism will remain at $ .045 per $100 of payroll (3.4% of premium

for per capita classes) and the current loss cost for natural disasters and catastrophic industrial

accidents will remain at $ .008 per $100 of payroll (0.7% of premium for per capita classes).

Page 32

October 2018 Loss Cost RevisionExhibit ISheet 1

Number of Indicated Differential FinalPolicy Expected Incurred USP Loss Lost Time Group Cred. Wt'd Ind. Group Adjustment Ind. Group

Industry Group Year Losses Losses on Ratio Cases Credibility Loss Ratio Differential Factor Differential

2011 $132,396,165 $150,310,873 1.135 1,5122012 $137,511,671 $150,429,503 1.094 1,473

Food&Bev Mfg. 2013 $132,622,815 $150,443,870 1.134 1,3752014 $148,569,270 $147,575,336 0.993 1,4382015 $152,184,318 $142,079,355 0.934 1,362

Total $703,284,239 $740,838,937 1.053 7,160 0.772 1.072 0.943 1.004 0.947

2011 $40,139,969 $44,646,683 1.112 4362012 $40,640,954 $40,256,794 0.991 381

Chemical Mfg. 2013 $42,065,128 $46,160,208 1.097 4492014 $42,827,834 $48,853,858 1.141 4112015 $47,610,755 $48,923,135 1.028 420

Total $213,284,640 $228,840,678 1.073 2,097 0.418 1.110 0.976 1.002 0.978

2011 $339,039,660 $395,313,295 1.166 3,6522012 $334,520,581 $380,509,463 1.137 3,753

All Other Mfg. 2013 $340,111,615 $393,438,404 1.157 3,6432014 $361,796,163 $411,189,889 1.137 3,6112015 $372,963,362 $386,863,130 1.037 3,276

Total $1,748,431,381 $1,967,314,181 1.125 17,935 1.000 1.125 0.990 1.004 0.994

2011 $1,178,787,021 $1,253,515,118 1.063 6,4402012 $1,225,922,964 $1,380,203,347 1.126 6,741

Contracting 2013 $1,296,297,141 $1,591,150,644 1.227 7,1752014 $1,419,940,995 $1,694,845,724 1.194 7,2072015 $1,622,945,401 $1,857,621,553 1.145 7,715

Total $6,743,893,522 $7,777,336,386 1.153 35,278 1.000 1.153 1.014 1.001 1.015

2011 $503,927,679 $552,961,073 1.097 6,2162012 $508,348,792 $557,761,854 1.097 6,288

Stores&Dealers 2013 $512,309,343 $616,064,648 1.203 6,3772014 $558,982,043 $643,396,670 1.151 6,6292015 $565,965,631 $627,731,697 1.109 6,231

Total $2,649,533,489 $2,997,915,942 1.131 31,741 1.000 1.131 0.995 0.999 0.994

2011 $845,895,288 $968,400,867 1.145 8,8202012 $874,128,094 $952,239,703 1.089 9,055

Prof&Office 2013 $935,394,716 $1,062,032,868 1.135 9,4342014 $1,004,496,040 $1,096,218,207 1.091 9,5722015 $999,793,925 $1,076,774,064 1.077 9,008

Total $4,659,708,064 $5,155,665,709 1.106 45,889 1.000 1.106 0.973 0.999 0.972

2011 $1,833,850,816 $2,029,839,179 1.107 19,3112012 $1,881,789,544 $2,121,500,054 1.127 19,642

Services 2013 $1,983,817,688 $2,353,430,933 1.186 20,9012014 $2,096,904,511 $2,401,631,524 1.145 20,4132015 $2,176,912,585 $2,461,492,790 1.131 20,077

Total $9,973,275,144 $11,367,894,480 1.140 100,344 1.000 1.140 1.003 1.001 1.003

2011 $349,472,202 $403,862,051 1.156 4,0012012 $359,547,214 $405,166,331 1.127 4,069

Miscellaneous 2013 $378,632,528 $422,367,215 1.116 4,0292014 $398,524,011 $512,230,300 1.285 4,2492015 $432,031,379 $527,101,011 1.220 4,371

Total $1,918,207,334 $2,270,726,908 1.184 20,719 1.000 1.184 1.041 0.993 1.034

2011 $10,199,773 $11,502,208 1.128 642012 $10,861,920 $10,757,663 0.990 78

Mar,Adm, Fed 2013 $12,236,370 $15,565,165 1.272 972014 $12,387,570 $8,796,945 0.710 862015 $13,000,967 $18,202,146 1.400 92

Total $58,686,600 $64,824,127 1.105 417 0.186 1.130 0.994 1.002 0.996

2011 $5,233,708,573 $5,810,351,347 1.110 50,4522012 $5,373,271,735 $5,998,824,712 1.116 51,480

All Ind Groups 2013 $5,633,487,345 $6,650,653,955 1.181 53,4802014 $6,044,428,438 $6,964,738,453 1.152 53,6162015 $6,383,408,323 $7,146,788,881 1.120 52,552

Total $28,668,304,414 $32,571,357,348 1.136 261,580 1.000 1.137 1.000 1.000 1.000

Cred. Std. 12,000

(Incurred Losses Determined by Revised Ratemaking Methodology)Determination of Industry Group Differentials


Expected Losses = Payroll x Mod x Current Loss Cost

Page 33

October 2018 Loss Cost RevisionExhibit I


Industry Group Differential Adjustment Factor Calculation(Incurred Losses Determined by Revised Ratemaking Methodology)

Effect of Med/IndIndustry Indemnity Medical Total Avg. Annual Wage TrendsGroup Losses Losses Losses Wage Trend On Ind. Group *

(1) (2) (3) (4) (5) (6)

1 $463,198,972 $277,639,965 $740,838,937 1.0187 1.00292 $134,518,641 $94,322,037 $228,840,678 1.0196 1.00083 $1,217,044,042 $750,270,139 $1,967,314,181 1.0182 1.00404 $4,520,534,342 $3,256,802,044 $7,777,336,386 1.0207 0.99855 $1,725,332,081 $1,272,583,861 $2,997,915,942 1.0229 0.99366 $3,001,018,003 $2,154,647,706 $5,155,665,709 1.0229 0.99377 $6,531,860,120 $4,836,034,360 $11,367,894,480 1.0206 0.99888 $1,362,808,157 $907,918,751 $2,270,726,908 1.0307 0.97689 $38,619,106 $26,205,021 $64,824,127 1.0199 1.0001

Total $18,994,933,464 $13,576,423,884 $32,571,357,348 1.0220 1.0401

(7) Annual Indemnity Trend from 10/2017 loss cost revision. 1.040

(8) Annual Medical Trend from 10/2017 loss cost revision. 1.020

* Effect by Group(6) = MedLossTrend(8)^2.25 / Group Wage Trend(5)^2.25Effect for Total(6) = IndLossTrend(7)^2.25 / Total Wage Trend(5)^2.25

Factors to NormalizedIndustry Adjust Indicated AdjustmentGroup Differentials Factors

(9) (10) (11)

1 1.0261 1.0042 1.0239 1.0023 1.0263 1.0044 1.0227 1.0015 1.0203 0.9996 1.0207 0.9997 1.0225 1.0018 1.0148 0.9939 1.0239 1.002

Total 1.0218 1.000

Page 34

October 2018 Loss Cost Revision Exhibit J

Trend Underlying Loss Cost

Trend Underlying Pure Premium

Average Trend Periods

Trend Adjustment (a)

Experience Adjustment (b)

Benefit Adjustment (c)

Pure Premium Multiplier (h)

(1) (2) (3) (4) = [(1)/(2)]^(3) (5) (6) (7) = (4)x(5)x(6) x TCFIndemnity 0.9976 1.0175 5.75 0.8925 0.8860 0.8529 0.6520Medical 0.9715 0.9980 5.75 0.8565 0.8860 1.0348 0.7591

Industry Group Industry GroupIndustry Group Differential Off-Balance (g) Indemnity Medical

1 - Food & Beverage Manufacturing 0.947 1.0861 0.6520 0.75912 - Chemical Manufacturing 0.978 1.1839 0.6520 0.75913 - All Other Manufacturing 0.994 1.0263 0.6520 0.75914 - Contracting 1.015 0.9828 0.6520 0.75915 - Stores & Dealers 0.994 0.9697 0.6520 0.75916 - Professional & Office 0.972 1.0648 0.6520 0.75917 - Sevices - All Other 1.003 0.9907 0.6520 0.7591

- Servants Per Capita (d) 1.003 0.9907 0.5489 0.63918 - Miscellaneous 1.034 0.9333 0.6520 0.75919 - Maritime, Admiralty & Federal - N.Y. 0.996 0.8472 0.6520 0.7591

- U.S.(e) 0.996 0.8472 0.8689 0.9028

Manual Loss Cost = { (Final Pure Premiums x Pure Premium Multipliers) x (1+LAE/Loss ) of 0.174 x (f) x Industry Group Differentials x Industry Group off-Balance (g)}, Subject to the swing limits of +/- 25% of the industry group change.

(a) Column (4): Removes the trend included in the pure premium (PP), and includes the indicated trends based on the latest financial data.(b) Column (5): Adjusts the loss experience from underlying the PP to the loss experience underlying the new loss cost filing.(c) Column (6): Adjusts the benefit level from the PP level to the benefit level as approved in the loss cost filing.(d) Not subject to Wage Factor of 1.03.(e) All U.S. Multipliers include a factor of 1.119 to reflect the U.S.L. Assessment for Special Funds.(f) For classes eligible for the New York Construction Classification Premium Adjustment Program, an off-balance factor of 1.008 has been applied.

For classes subject to the Payroll Limitation Law, a factor of 1.000 has been applied.(g) Used to achieve the overall change for each industry group.(h) Multiplier includes a test correction factor (TCF) of 0.96668 in order to achieve the approved loss cost indication.(i) Loss costs for all Maritime classes are applied with an off-balance factor of .8018.

Loss costs for Maritime classes providing Federal coverage are applied with a factor of 1.1034 to reflect the updated federal benefit differential.

Pure Premium Multipliers


Pure Premium Multipliers

Page 35

October 2018 Loss Cost Revision Exhibit K

Percentage Change in Manual Total Number

Industry Group Differential Loss Cost Level Decreased Increased Unchanged of Classes

1 1. Food & Beverage Mfg. 0.947 -16.8% 24 0 0 242 2. Chemical Mfg. 0.978 -14.1% 19 3 0 223 3. All Other Mfg. 0.994 -12.7% 176 8 2 1864 4. Contracting 1.015 -10.9% 82 4 1 875 5. Stores & Dealers 0.994 -12.7% 42 2 0 446 6. Professional and Office 0.972 -14.4% 23 0 0 237 7. Services 1.003 -11.8% 76 3 0 798 8. Miscellaneous 1.034 -9.2% 48 6 0 549 9. Maritime, Admiralty & Federal 0.996 -12.5% 30 8 0 38

Total 1.000 -12.1% 520 34 3 557


Changes in Classification Loss CostsBy Industry Group

Set forth below are the percentage changes in manual loss cost level for each industry group and the number of classificationsfor which loss costs were increased or decreased, as well as those for which no change was developed.

Page 36

October 2018 Loss Cost Revision Exhibit L

The manual loss costs were calculated to fall within the following swing limits:

Industry Group Upper Limits * Lower Limits*

1. Food & Beverage Mfg. 8.2% -41.8%2. Chemical Mfg 11.0% -39.0%3. All Other Mfg. 12.4% -37.6%4. Contracting 14.2% -35.8%5. Stores & Dealers 12.4% -37.6%6. Professional and Office 10.4% -39.6%7. Services 13.2% -36.8%8. Miscellaneous 15.9% -34.1%9. Maritime, Admiralty & Federal 12.5% -37.5%

* Upper and lower limits are +/-25% of the respective industry group change as shown in Exhibit K.

The classifications which have been limited are listed below:

Limited by Lower Swing

251 73643027 80685037 8901682668439545


Swing Limits in Classification Loss Costs By Industry Group

Note: Limits do not apply to the classifications to be discontinued, which are subject to a loss cost transitional program.

Limited by Upper Swing

Page 37

October 2018 Loss Cost Revision Exhibit AA


Loss Cost Level Test *

Excluding the Experience of Self-Insured Risks

Premium at Premium at Loss Cost10/1/2017 10/1/2018 Level Change

Industry Group Loss Costs Loss Costs (3)/(2) (1) (2) (3) (4)

1 Food & Beverage Mfg. $164,611,753 $136,914,579 0.8322 Chemical Mfg $55,748,113 $47,861,309 0.8593 All Other Mfg. $407,487,952 $355,777,006 0.8734 Contracting $1,718,051,042 $1,531,563,695 0.8915 Stores & Dealers $575,231,494 $501,982,532 0.8736 Professional and Office $1,102,462,069 $944,208,661 0.8567 Services $2,282,972,703 $2,012,797,240 0.8828 Miscellaneous $424,685,856 $385,717,292 0.9089 Maritime, Admiralty & Federal $12,247,284 $10,716,459 0.875

A. Total Loss Cost Change $6,743,498,265 $5,927,538,773 0.879

B. Change in Terrorism Provisions (Exhibit H) 1.000

C. Change in Natural Disasters and Industrial Cats 1.000

D. Overall Change[ (A) x .974] + [ (B) x .021)+ (C) x .005 ] 0.883.

* Based on Policy Year 2015 New York Statistical Plan Experience.

Page 38

October 2018 Loss Cost RevisionExhibit BB

Sheet 1

PolicyYear 1st Report 2nd Report 3rd Report 4th Report 5th Report 6th Report

2007 Dev. 5/6 2,028,676,647 2,029,792,489 1.0012008 Dev. 5/6 1,986,786,449 1,982,947,316 0.9982009 Dev. 5/6 1,416,189,644 1,417,322,153 1.0012010 Dev. 5/6 1,534,258,244 1,534,995,376 1.0002011 Dev. 5/6 1,686,001,991 1,685,925,069 1.000





1st/2nd 2nd/3rd 3rd/4th 4th/5th 5th/6th 6th/Ult.5 Year AverageAge to Age 1.008 0.999 0.999 1.000 1.000 1.000Age to Ult. 1.006 0.998 0.999 1.000 1.000 1.000

4 Year AverageAge to Age 1.011 1.000 0.999 0.999 1.000 1.000Age to Ult. 1.009 0.998 0.998 0.999 1.000 1.000



Premium development to ultimate* 1.011 0.999 0.999 1.000 1.000 1.000

*Premium development based on three year average


Development Factors - Premiums

Private Carriers Excluding Large Deductible Experience

Page 39


Sheet 2

PolicyYear 1st Report 2nd Report 3rd Report 4th Report 5th Report 6th Report 7th Report 8th Report 9th Report 10th Report

2003 Dev. 9/10 600,074,710 607,027,593 1.0122004 Dev. 9/10 565,311,767 571,938,923 1.0122005 Dev. 9/10 548,296,109 552,882,897 1.0082006 Dev. 9/10 589,280,570 592,511,672 1.0052007 Dev. 9/10 684,067,726 689,081,151 1.007









Development 1st/Ult. 2nd/Ult. 1st/2nd 2nd/3rd 3rd/4th 4th/5th 5th/6th 6th/7th 7th/8th 8th/9th 9th/10th

5 Year Average 2.296 1.561 1.471 1.190 1.089 1.043 1.020 1.012 1.012 1.012 1.0094 Year Average 2.210 1.513 1.461 1.182 1.082 1.042 1.014 1.009 1.009 1.008 1.0083 Year Average 2.147 1.481 1.450 1.175 1.078 1.043 1.010 1.008 1.007 1.007 1.0072 Year Average 2.096 1.468 1.428 1.169 1.072 1.047 1.008 1.008 1.005 1.006 1.006Latest Year 2.082 1.480 1.407 1.172 1.087 1.028 1.005 1.008 1.007 1.005 1.007Mid 3 of 5 2.278 1.540 1.479 1.188 1.090 1.040 1.016 1.009 1.011 1.009 1.009

Loss development to ultimate* 2.296 1.561

*Loss development based on 5 year average

Note: Policy years 2000 and 2001 adjusted for losses associated with the terrorist attack of September 11, 2001.



Policy Year Development Factors - Indemnity Losses (Case Basis)

Page 40


Sheet 2A

PolicyYear 10th Report 11th Report 12th Report 13th Report 14th Report 15th Report 16th Report 17th Report 18th Report 19th Report










Development 10th/11th 11th/12th 12th/13th 13th/14th 14th/15th 15th/16th 16th/17th 17th/18th 18th/19th

5 Year Average 1.010 1.004 1.006 1.003 1.005 1.005 1.003 1.004 1.0034 Year Average 1.008 1.004 1.007 1.004 1.005 1.005 1.002 1.005 1.0023 Year Average 1.007 1.002 1.008 1.002 1.005 1.005 1.003 1.005 1.0022 Year Average 1.007 1.000 1.008 1.005 1.006 1.006 1.003 1.006 1.002Latest Year 1.008 1.007 1.010 1.005 1.002 1.011 1.004 1.007 0.999Mid 3 of 5 1.009 1.006 1.006 1.004 1.004 1.004 1.003 1.004 1.003




Page 41


Sheet 2B

PolicyYear 19th Report 20th Report 21st Report 22nd Report 23th Report 24th Report 25th Report 26th Report 27th Report 28th Report

1985 Dev. 27/281986 Dev. 27/281987 Dev. 27/281988 Dev. 27/281989 Dev. 27/28









Development 19th/20th 20th/Ult.*

5 Year Average 1.003 1.0344 Year Average 1.004 1.0343 Year Average 1.003 1.0342 Year Average 1.003 1.034Latest Year 1.004 1.034Mid 3 of 5 1.004 1.034

* From Exhibit BB, Sheet 2I




Page 42


Sheet 2C














*Loss development based on 5 year average



Policy Year Development Factors - Medical Losses (Case Basis)


Page 43

October 2018 Loss Cost RevisionExhibit BBSheet 2D
















Page 44


Sheet 2E













* From Exhibit BB, Sheet 2I




Page 45


Sheet 2F

Indemnity Medical

1. Case incurred losses for Policy Year 1987 valued as of 12/31/07 563,818,535 234,915,6232. Case incurred losses for Policy Year 1988 valued as of 12/31/08 589,611,608 274,333,3523. Case incurred losses for Policy Year 1989 valued as of 12/31/09 645,606,245 303,053,064

4a. Change in case incurred losses from 12/31/07 to 12/31/08 for 2,494,557 4,559,858Policy Year 1987

4b. Change in case incurred losses from 12/31/07 to 12/31/08 for 8,878,122 4,179,195all Policy Years prior to 1987





7a. Growth Factor for 1987 Line 4b. 0.832 0.8237b. Growth Factor for 1988 Line 5b. 0.827 0.7337c. Growth Factor for 1989 Line 6b. 0.773 0.692

8. Development factor 20th to ultimate: Average [(8a.)+(8b.)+(8c.)]/3 1.036 1.0658a. 1+[(4a)/(1)]+{[4b]/[(1)*(7a)]} 1.023 1.0418b. 1+[(5a)/(2)]+{[5b]/[(2)*(7b)]} 1.052 1.1088c. 1+[(6a)/(3)]+{[6b]/[(3)*(7c)]} 1.034 1.046











Policy Year Loss Development Factors from 20th Report (Case Basis) to Ultimate Incurred

Private Carriers Excluding Large Deductible ExperienceIncluding Growth Factor

Page 46

October 2018 Loss Cost Revision Exhibit BB

Sheet 2G

Indemnity Medical


















30a. Change in case incurred losses from 12/31/12 to 12/31/13 for 1,258,279 118,699Policy Year 1992




Page 47


Sheet 2H

Indemnity Medical


















46a. Change in case incurred losses from 12/31/14 to 12/31/15 for 2,997,072 -141,673Policy Year 1994




Page 48


Sheet 2I

Indemnity Medical



















62b. Change in case incurred losses from 12/31/16 to 12/31/17 for 14,384,792 486,133all Policy Years prior to 1996



65. Indicated average development factor from 20th to ultimate 1.034 1.053[(8)+(16)+(24)+(32)+(40)+(48)+(56)+(64)]/ 8

Page 49

October 2018 Loss Cost RevisionExhibit CC

Sheet 1

Experience from Large Deductible Policies Only



2008 Dev. 4/5 760,572,662 763,055,876 1.0032009 Dev. 4/5 495,245,958 494,098,029 0.9982010 Dev. 4/5 770,099,162 770,514,724 1.0012011 Dev. 4/5 984,788,589 983,102,574 0.9982012 Dev. 4/5 1,186,219,492 1,204,092,617 1.015

2009 Dev. 3/4 684,597,588 684,087,420 0.9992010 Dev. 3/4 774,988,608 770,099,162 0.9942011 Dev. 3/4 985,254,164 987,287,144 1.0022012 Dev. 3/4 1,189,327,825 1,189,009,609 1.0002013 Dev. 3/4 1,292,036,145 1,308,617,242 1.013

2010 Dev. 2/3 767,705,995 774,988,608 1.0092011 Dev. 2/3 986,032,748 985,254,164 0.9992012 Dev. 2/3 1,196,933,780 1,192,239,491 0.9962013 Dev. 2/3 1,285,037,777 1,292,882,597 1.0062014 Dev. 2/3 1,589,307,185 1,627,600,655 1.024

2011 Dev. 1/2 970,029,241 986,056,341 1.0172012 Dev. 1/2 1,182,121,379 1,196,933,780 1.0132013 Dev. 1/2 1,272,675,876 1,288,874,317 1.0132014 Dev. 1/2 1,595,164,574 1,592,014,359 0.9982015 Dev. 1/2 1,835,710,753 1,901,664,949 1.036

1st/2nd 2nd/3rd 3rd/4th 4th/5th 5th/6th 6th/Ult. All Year AverageAge to Age 1.015 1.007 1.002 1.003 1.004 1.000Age to Ult. 1.031 1.016 1.009 1.007 1.004 1.000




Mid 3 of 5 Year AverageAge to Age 1.014 1.005 1.000 1.001 1.001 1.000Age to Ult. 1.021 1.007 1.002 1.002 1.001 1.000




Development Factors - Premiums

Page 50


Sheet 2














*Loss development to ultimate based on 5 year average for 1st to 20th maturities and 5 year average of non-deductible experience for 20th to ultimate.




Page 51

October 2018 Loss Cost RevisionExhibit CCSheet 2A
















Page 52

October 2018 Loss Cost RevisionExhibit CCSheet 2B
















Page 53


Sheet 2C














*Loss development to ultimate based on 5 year average for 1st to 20th maturities and 5 year average of non-deductible experience for 20th to ultimate.




Page 54

October 2018 Loss Cost RevisionExhibit CCSheet 2D
















Page 55


Sheet 2E











Development 19th/20th 20th/Ult





Page 56

October 2018 Loss Cost RevisionExhibit DD

Sheet 1







1st/2nd 2nd/3rd 3rd/4th 4th/5th 5th/6th 6th/Ult.5 Year AverageAge to Age 0.998 0.994 0.998 0.999 1.000 1.000Age to Ult. 0.989 0.991 0.997 0.999 1.000 1.000







Development Factors - Premium

New York State Insurance Fund

Page 57


Sheet 2














*Loss development based on 5 year average; except 11th/12th Mid 3 of 5





Page 58


Sheet 2A

PolicyYear 10th Report 11th Report 12th Report 13th Report 14th Report 15th Report 16th Report 17th Report 18th Report 19th Report 19th Report















Page 59


Sheet 2B










1993 Dev. 19/20 1,029,590,130 1,036,010,525 1.0061994 Dev. 19/20 887,751,287 896,224,857 1.0101995 Dev. 19/20 707,845,015 711,292,837 1.0051996 Dev. 19/20 601,546,688 605,586,238 1.0071997 Dev. 19/20 517,964,327 521,822,850 1.007



* From Exhibit DD, Sheet 2I




Page 60


Sheet 2C














*Loss development based on 5 year average.





Page 61


Sheet 2D
















Page 62


Sheet 2E













* From Exhibit DD, Sheet 2I


Worker's Compensation - New York


Page 63


Sheet 2F

Indemnity Medical




5a. Change in case incurred losses from 12/31/08 to 12/31/09 for 816,324 2,149,844Policy Year 1988







12a. Change in case incurred losses from 12/31/08 to 12/31/09 for 816,324 2,149,844Policy Year 1988







16. Development factor 20th to ultimate: Average [(16a)+(16b)+(16c)]/3 1.062 1.06316a. 1+[(12a)/(9)]+{[12b]/[(9)*(15a)]} 1.049 1.04616b. 1+[(13a)/(10)]+{[13b]/[(10)*(15b)]} 1.057 1.04816c. 1+[(14a)/(11)]+{[14b]/[(11)*(15c)]} 1.081 1.095



New York State Insurance Fund Including Growth Factor

Page 64

October 2018 Loss Cost Revision Exhibit DD

Sheet 2G

Indemnity Medical




17. Case incurred losses for Policy Year 1989 valued as of 12/31/09 734,674,594 252,304,358 18. Case incurred losses for Policy Year 1990 valued as of 12/31/10 900,113,670 316,489,943 19. Case incurred losses for Policy Year 1991 valued as of 12/31/11 977,409,872 334,742,444

20a. Change in case incurred losses from 12/31/09 to 12/31/10 for 5,080,182 3,469,295 Policy Year 1989

20b. Change in case incurred losses from 12/31/09 to 12/31/10 for 21,819,914 5,370,756 all Policy Years prior to 1989







25. Case incurred losses for Policy Year 1990 valued as of 12/31/10 900,113,670 316,489,943 26. Case incurred losses for Policy Year 1991 valued as of 12/31/11 977,409,872 334,742,444 27. Case incurred losses for Policy Year 1992 valued as of 12/31/12 1,031,899,417 347,831,641









Page 65


Sheet 2H

Indemnity Medical




33. Case incurred losses for Policy Year 1991 valued as of 12/31/11 977,409,872 334,742,444 34. Case incurred losses for Policy Year 1992 valued as of 12/31/12 1,031,899,417 347,831,641 35. Case incurred losses for Policy Year 1993 valued as of 12/31/13 1,036,010,525 356,795,181









41. Case incurred losses for Policy Year 1992 valued as of 12/31/12 1,031,899,417 347,831,64142. Case incurred losses for Policy Year 1993 valued as of 12/31/13 1,036,010,525 356,795,18143. Case incurred losses for Policy Year 1994 valued as of 12/31/14 896,224,857 320,036,569









Page 66


Sheet 2I

Indemnity Medical




49. Case incurred losses for Policy Year 1993 valued as of 12/31/13 1,036,010,525 356,795,18150. Case incurred losses for Policy Year 1994 valued as of 12/31/14 896,224,857 320,036,56951. Case incurred losses for Policy Year 1995 valued as of 12/31/15 711,292,837 290,627,853


















Indicated average development factor from 20th to ultimate 1.070 1.07265. [(8)+(16)+(24)+(32)+(40)+(48)+(56)+(64)]/ 8

Page 67

October 2018 Loss Cost RevisionExhibit EE

Sheet 1

Trend AnalysisClaim Frequency - All Carriers Excluding Large Deductible Experience

Frequency = developed claim counts per 1,000,000 of onleveled premium adjusted for wage growth

Financial DataPolicy Year Claim Frequency

PY2012 8.2832013 8.2392014 8.2122015 8.2432016 8.121

Trend R squared2012-2016 -0.4% 0.696

7.900

8.000

8.100

8.200

8.300

8.400

2012 2013 2014 2015 2016

Freq

uenc

y Pe

r Mill

ion

Dolla

rs o

f Sta

ndar

d Pr

emiu

m a

t DSR

Lev

el

PY Financial Data 5-Year Trend

Page 68


Sheet 2

Trend AnalysisIndemnity Severity - All Carriers Excluding Large Deductible Experience

Financial Data

PY2012 52,1402013 55,9362014 58,4712015 57,1282016 60,355

Trend R squared2012-2016 3.2% 0.817

Policy Year Average Indemnity Claim Severity

48,000

50,000

52,000

54,000

56,000

58,000

60,000

62,000

2012 2013 2014 2015 2016

Inde

mni

ty C

laim

Sev

erity


Page 69


Sheet 3

Trend AnalysisMedical Severity - All Carriers Excluding Large Deductible Experience

Financial Data

PY2012 31,0812013 32,8692014 32,6052015 32,6382016 32,007

Trend R squared2012-2016 0.5% 0.126

Policy Year Average Medical Claim Severity

30,000

31,000

32,000

33,000

34,000

35,000

2012 2013 2014 2015 2016

Med

ical

Cla

im S

ever

ity


Page 70


Sheet 4

Actual * Exponential Linear

2013 1,213.75 1,223.62 1,223.012014 1,267.21 1,255.02 1,255.552015 1,296.48 1,287.23 1,288.092016 1,305.92 1,320.26 1,320.642017 1,357.11 1,354.14 1,353.18

Projected Average Annual Change 2.6% 2.5%

R Squared 0.950 0.953

* Average weekly wages from N. Y. Department of Labor for all industries

Projected Economic Changes **

Employment Total Wages Average Wages Projected AWW

2018 1.3% 3.8% 2.5% 1,391.042019 1.3% 5.0% 3.7% 1,442.51

Total AnnualizedProjected change 2015 - 2019 11.3% 2.7%Projected change 2016 - 2019 10.5% 3.4%

Selected Annual Wage Trend 3.0%

* Average weekly wages from N.Y. Department of Labor for all industries** Based on the New York State Assembly's 2018 Economic Report

Fitted Regression LinesExperience Period


Analysis of New York Average Wage Trends

New York Average Weekly Wage

Page 71

October 2018 Loss Cost Revision Exhibit GG

Sheet 1

1 Injury Type Permanent Total Perm Partial - Major Perm Partial - Minor TemporaryCurrent Proposed Current Proposed Current Proposed Current Proposed Current Proposed

2 Effective Date July 1, 2017 July 1, 2018 July 1, 2017 July 1, 2018 July 1, 2017 July 1, 2018 July 1, 2017 July 1, 2018 July 1, 2017 July 1, 20183 % Compensation 0.6667 0.6667 0.6667 0.6667 0.6667 0.6667 0.6667 0.6667 0.6667 0.66674 Minimum Comp $30.00 $30.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.005 Maximum Comp $870.61 $904.74 $870.61 $904.74 $870.61 $904.74 $870.61 $904.74 $870.61 $904.746 Eff Wkly Wage for Min (4)/ (3) $45.00 $45.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.007 Eff Wkly Wage for Max (5)/ (3) $1,305.92 $1,357.11 $1,305.92 $1,357.11 $1,305.92 $1,357.11 $1,305.92 $1,357.11 $1,305.92 $1,357.118 Avg Weekly Wage $1,599.59 $1,599.59 $1,599.59 $1,599.59 $661.01 $661.01 ** $661.01 $661.01 ** $1,599.59 $1,599.599 Ratio to Avg -Min- (6)/(8) 0.03 0.03 0.14 0.14 0.34 0.34 0.34 0.34 0.14 0.14

10 Ratio to Avg -Max- (7)/(8) 0.82 0.85 0.82 0.85 1.98 2.05 1.98 2.05 0.82 0.8511 "B" Value for (9) 0.0022 0.0022 0.0868 0.0868 1.3131 1.3131 1.3131 1.3131 0.0868 0.086812 "B" Value for (10) 24.7822 27.0409 24.7822 27.0409 85.5427 87.1541 85.5427 87.1541 24.7822 27.040913 Difference (12) - (11) 24.7800 27.0387 24.6954 26.9541 84.2296 85.8410 84.2296 85.8410 24.6954 26.954114 "A" Value for (9) 0.1346 0.1346 1.0595 1.0595 5.7984 5.7984 5.7984 5.7984 1.0595 1.059515 "A" Value for (10) 44.3959 47.1012 44.3959 47.1012 94.1378 94.9379 94.1378 94.9379 44.3959 47.101216 Difference 100 - (15) 55.6041 52.8988 55.6041 52.8988 5.8622 5.0621 5.8622 5.0621 55.6041 52.898817 (9) x (14) 0.0040 0.0040 0.1483 0.1483 1.9715 1.9715 1.9715 1.9715 0.1483 0.148318 Product (10 )x (16) 45.5954 44.9640 45.5954 44.9640 11.6071 10.3773 11.6071 10.3773 45.5954 44.964019 'Limit' Factor {(13) + (17) + (18) 70.3794 72.0068 70.4391 72.0664 97.8081 98.1897 97.8081 98.1897 70.4391 72.066420 Eff. Avg. Weekly Wage (8) x (19) $1,125.78 $1,151.82 $1,126.74 $1,152.77 $646.52 $649.04 $646.52 $649.04 $1,126.74 $1,152.7721 Average Weekly Benefit $750.52 $767.88 $751.16 $768.51 $431.01 $432.70 $431.01 $432.70 $751.16 $768.5122 Indicated Change in Costs - 2.3% - 2.3% - 0.4% - 0.4% - 2.3%

** PPD average wage adjusted for average % disability rating.

New York Incurred Losses * July 1, 2017 Benefit Change July 1, 2018

Death $396,877,688 2.3% $406,005,875Permanent Total $529,645,368 2.3% $541,827,212Permanent Partial - Major $10,665,034,422 0.4% $10,707,694,560Permanent Partial - Minor $497,972,057 0.4% $499,963,945Temporary $2,870,091,725 2.3% $2,936,103,834

Total Indemnity $14,959,621,260 0.9% $15,091,595,426

* Policy Year 2011-2015 Unit Statistical Plan data are for all carriers, on_leveled, developed.

Indemnity Losses as Percent of Total Losses 0.650Medical Losses as Percent of Total Losses 0.350

Estimated Claim Cost Effect of Benefit Change = 0.6%{( 0.65 x 1.009 + (0.35 x 1.00)} - 1.00

Factor to Reflect Expected Increase in System Utilization 1.10

Estimated Rate Level Effect of Benefit Change = 0.7%

Estimated Premium Effect of Benefit Change = $39,699,836


Maximum @ July 1, 2018 = 2/3 SAWW Per Week

Death

Page 72


Sheet 2Workers' Compensation - New York Maximum

@ July 1, 2019 = 2/3 SAWW Per Week







Total Indemnity $15,091,595,426 0.6% $15,183,477,455







Death

Page 73



Maximum @ July 1, 2020 = 2/3 SAWW Per Week







Total Indemnity $15,183,477,455 0.9% $15,319,113,089







Death

Page 74

(212) 709 -3500 | One State St ree t , New York , NY 10004-1511 | www.dfs .ny .gov

Maria T. Vullo Superintendent

Andrew M. Cuomo Governor

July 13, 2018

Mr. Jeremy Attie, President and CEO

New York Compensation Insurance Rating Board

733 Third Avenue

New York, NY 10017

RE: Company File #: LOSS COST REVISION 2018

Department File #: R2018001701

Dear Mr. Attie:

This is in reference to Mr. Ziv Kimmel’s letter dated May 15, 2018, submitting the captioned filing.

In this filing, New York Compensation Insurance Rating Board requests approval of an average reduction in the overall loss cost level of 11.7%.

The filing is hereby approved effective October 1, 2018.

Very truly yours,

Maria T. Vullo

Superintendent

By:

Alexander Vajda

Supervising Actuary

Property Bureau

212-480-5524

[email protected]

new york workers’ compensation october 1, 2018 loss cost ... · the premiums are then brought to...

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