How Rates for Insurance Premiums are Set

Designated Insurance Rate Service Organization

NCCI is Tennessee’s designated insurance rate service organization. They created the framework for workers' compensation insurance pricing, but employers should consult with insurance professionals to navigate the specifics.

Reporting Your Policy

Adjusting entities are required to notify NCCI within thirty (30) calendar days from procurement or renewal of workers’ compensation insurance.

Standardized Job Classifications

NCCI's class code system categorizes jobs to help determine workers' compensation insurance rates.

Each class code has a specific description that helps insurers and employers accurately classify workers. Some jobs might have similar codes in different categories, which is why it's important to get precise details about the specific work being performed. The class code is crucial because it directly impacts the premium rate. More dangerous jobs (like roofing) have higher rates, while less risky jobs have lower rates. Insurance carriers use these NCCI-defined codes to calculate workers' compensation insurance premiums.

Each class code that identifies the type of work being performed has a specific set rate of premium per $100.00 of payroll. The Governing Class Code is the class code that reports the highest payroll, which is the way an employer can be identified as a Construction Services Provider or a Non-Construction employer.