Boca Raton, FL – NCCI recently released a new Insights article on the Workers’ Compensation Residual Market that examines the structure of the residual market, including NCCI’s role as a Plan and Pool Administrator, and presents countrywide residual market summary statistics.
Having workers compensation (WC) coverage is generally required for all employers by statute. But what happens when employers cannot obtain coverage due to their size, newness, loss history, or type of hazardous business? In these cases, they may enter the “residual market.”
The residual market, also known as the assigned risk market, is something of a safety net for employers and employees alike. Each state’s residual market is managed by either a State Fund, Joint Underwriting Association, Assigned Risk Reinsurance Plan, NCCI’s Workers Compensation Insurance Plan (WCIP or Plan), or an alternative mechanism.
Currently, NCCI is the designated residual market plan administrator for 22 jurisdictions. As the plan administrator for these jurisdictions, NCCI is responsible for a variety of functions, including:
- Application processing
- Eligibility determination for insurance
- Assignment of risks
- Oversight of the servicing carrier selection process
- The Plan Administrator role can also include administration of a reinsurance pooling mechanism (aka Pool Administrator)
Read the full NCCI Insights brief: Insuring the Uninsurable – Workers Compensation’s Residual Market