Connecticut Insurance Commissioner Joshua Hershman opened a 30-day public comment period on September 30, 2026, on a National Council on Compensation Insurance (NCCI) proposal to cut the state’s voluntary workers’ compensation loss costs by 4.9% and assigned risk rates by 5.8%, effective January 1, 2027. If approved, it would be the thirteenth consecutive annual decrease in Connecticut. Insurance Journal reported the filing and the comment window, which runs through late October; the department does not intend to hold a public hearing, and comments go to cid.pc@ct.gov.
The headline direction is familiar by now. What is different in this filing, and what matters for reserve assumptions, is what is underneath it: NCCI held its indemnity and medical trend projections unchanged, the decrease is driven by experience rather than by an assumption that costs will keep falling, and the countrywide data NCCI published alongside the filing shows the underwriting margin that has funded more than a decade of cuts eroding quickly.
What the filing actually says
The proposal is based on premium and loss experience for policy years 2023 and 2024, evaluated as of year-end 2025. NCCI’s summary attributes the decrease primarily to improved experience relative to the filing that took effect January 1, 2026. Connecticut’s lost-time claim frequency declined again in the latest policy year, continuing its long-term slide. The filing also reflects the estimated impact of medical fee schedule changes effective January 1, 2026, and an update to the loss adjustment expense provision.
Two details deserve attention from anyone who signs off on accruals. First, NCCI states plainly that this filing does not change the approved indemnity and medical trend projections. The 4.9% is not a bet that the favorable run accelerates; it is a mechanical reflection of realized experience. Second, the loss adjustment expense provision was updated. Loss adjustment expense is the claims-handling and defense cost load, and for a self-insured employer it maps directly to the TPA fee and defense cost assumptions sitting inside your own expected claim ratio.
For context on the arc: the department approved a 6.1% voluntary loss cost reduction for 2025 and a 3.8% reduction for 2026, alongside a 0.4% assigned risk cut. The proposed 4.9% for 2027 sits in the same single-digit band, well below the cuts that built the streak in its early years.
Who it affects
Self-insured Connecticut employers across all classes, since NCCI loss costs are the standard benchmark against which finance teams sanity-check their own expected claim ratios. Multi-state self-insureds and captives writing workers’ compensation in several NCCI states, who are currently reconciling a wide spread of state filings in the same cycle; our earlier coverage of New Hampshire’s fifteenth consecutive cut and of Tennessee’s move in the opposite direction shows the range. Public entities and hospital systems with Connecticut payrolls that carry WC risk through a pool or captive. And any employer that has used a decade of falling loss costs as implicit support for assuming favorable development in its own book.
The margin is compressing from both ends
The countrywide data in NCCI’s filing summary is the part trade coverage skipped. The Calendar Year 2025 combined ratio for workers’ compensation was 91%, up from 86% for Calendar Year 2024, a five-point move in a single year that NCCI attributes primarily to increases in the loss and underwriting expense ratios. A combined ratio below 100% still means the line is profitable. But the direction and speed of the move tell you how much of the cushion is left.
Look at the components. Lost-time claim frequency fell 2% from 2024 to 2025 after adjusting for pay levels, which NCCI describes as more moderate than both the long-term average and recent experience. Medical severity for lost-time claims grew 4%, driven primarily by increased utilization of medical services. Indemnity severity also grew 4%, which is unsurprising given that indemnity benefits track wages, and average wages rose 4.3% in 2025 while payroll grew 4.8% against just 0.5% employment growth.
Put those together and the arithmetic is uncomfortable for anyone extrapolating the streak. The filed decrease is now roughly the size of the frequency decline alone, with severity running at 4% on both the medical and indemnity sides. If frequency’s long-term decline continues to moderate, the loss cost cuts shrink with it, because NCCI is not assuming trend relief it does not see. The 13-year run of decreases is not over, but the engine behind it is down to one cylinder.
This is the trap we flagged when New Hampshire’s fifteenth cut landed at the same moment NCCI’s accident-year data showed underlying costs running above breakeven: a falling benchmark can flatter your own numbers while your book runs hotter than the market average. Connecticut’s filing adds a second warning, because the combined ratio deterioration shows the market’s margin thinning at the same time.
Where this shows up in your reserves
Open your most recent actuarial report and find the expected claim ratio selection for Connecticut, usually in the ratemaking or benchmarking section rather than the reserve indication itself. Two questions. Does the ECR, or the trend adjustment behind it, embed a continuation of the historical loss cost decline, or does it reflect the current 4% severity environment with a moderating frequency offset? And if your program has booked favorable development or selected toward the low end of the actuarial range in recent years partly because the benchmark kept falling, how much of that selection survives a filing cycle in which the decrease is experience-driven and the combined ratio moved five points?
For prospective arrangements, guaranteed cost or loss-sensitive, the loss cost change flows into the 2027 pricing baseline your TPA or carrier will quote from. For a self-insured carrying the risk, the same change should flow into your expected loss ratio, not just into what you expect to pay for insurance you are not buying.
What this means for your next review
Put the Connecticut benchmark reconciliation on the agenda for your next reserve study or interim monitoring meeting. The specific ask: have your actuary show the 2027 ECR under two scenarios, one that extrapolates the loss cost trend and one that holds severity at the observed 4% with frequency flat, and quantify the difference in dollars. If the gap is material relative to your IBNR, that is your early warning. Also confirm whether the updated loss adjustment expense provision in the filing changes the claims-handling load in your own ECR, since TPA and defense costs are part of the same provision NCCI just repriced.
Decision-maker checklist
- Ask your actuary whether your 2027 expected claim ratio for Connecticut embeds a continuing loss cost decline or the current 4% severity trend, and request the two-scenario comparison in writing.
- Pull the last three years of your own Connecticut development triangles and test whether your favorable development has been tracking the market benchmark or your own claim mix; the methods in our workers’ compensation IBNR guide and the expected loss ratio method walkthrough make this a one-meeting exercise.
- Confirm your medical-to-indemnity mix against the state’s, since a filing driven by utilization-driven medical severity at 4% lands differently on a book that is indemnity-heavy.
- If you operate in multiple NCCI states, reconcile states filing decreases against states filing increases in the same cycle rather than blending them into a single national trend assumption.
- Submit comments to the Connecticut Insurance Department at cid.pc@ct.gov before the window closes if the approved figure would change a benchmark you rely on; the department has said it will not hold a hearing, so the written record is the only record.
Watch the department’s final order, expected after the comment period closes in late October. The number to compare against is the approved 3.8% for 2026: if the final order trims the proposed 4.9%, the deceleration thesis strengthens; if it approves as filed, the experience-driven cut still tells you the margin is thinner than it was two cycles ago.
Sources
- Insurance Journal: Connecticut Weighs 4.9% Workers’ Comp Loss Cost Decrease for 2027 (September 30, 2026)
- NCCI: Summary of the Proposed Connecticut Workers Compensation Loss Cost and Assigned Risk Rate Filing Effective January 1, 2027
- Connecticut Insurance Department: NCCI Rate and Loss Cost Filing Notice for 2027