The Nevada Division of Insurance approved a 21.6% increase in workers compensation loss costs effective March 1, according to the National Council on Compensation Insurance.
NCCI attributes the adjustment to Nevada-specific pressures rather than a nationwide pricing shift.
Chief Actuary Donna Glenn states the state’s experience reflects elevated large losses, flattening claim frequency, rising severity, and structural constraints tied to its payroll cap framework.
State data show both claim counts and average claim costs trending upward, with projections indicating continued increases into the next filing cycle.
Lost-time claim frequency has stabilized after years of decline, partly driven by sustained claim growth in the leisure and hospitality sector. Large loss activity remains concentrated in construction.
Wage growth across Nevada’s labor market also drives higher indemnity payments. As wages rise, statutory benefits increase proportionally, lifting total system costs.
A structural issue compounds the pressure. Nevada applies a $36,000 annual payroll cap when calculating premiums across all class codes.
Benefit costs escalate with wages, but premium calculations reflect earnings only up to the capped threshold.
That mismatch compresses margins and raises loss ratios during periods of strong wage growth. Nevada stands as the only NCCI state applying a universal payroll limitation.
In 2025, lawmakers enacted S.B. 317 to increase the payroll cap used in premium calculations. The change takes effect October 1 and does not affect the March 1 filing.
According to Beinsure analysts, jurisdictions with payroll caps face heightened volatility when wage inflation accelerates, as premium growth lags underlying benefit exposure.
Nevada’s latest adjustment signals recalibration to restore balance between premium base and claim cost trajectory.
