Demystifying the NCCI Assigned Risk Program and VCAP:A Guide for Oklahoma Employers
Navigating workers' compensation insurance in Oklahoma can be daunting—especially when your business is placed into the National Council on Compensation Insurance (NCCI) Assigned Risk Plan. This white paper is designed to provide clarity on Oklahoma’s evolving Assigned Risk Program and the Voluntary Coverage Assistance Program (VCAP). With recent legislative changes and updated NCCI filings, understanding the landscape is more important than ever. Whether you're a business owner, CFO, or HR manager, this guide will help you understand the process, explore options, and potentially reduce your premiums.
1. Introduction to the Assigned Risk Plan in OK
Workers' compensation insurance is mandatory in Oklahoma, yet not all businesses can easily secure coverage through the voluntary market. For these businesses—typically those with high-risk operations, a history of losses, or insufficient underwriting data—the Assigned Risk Plan serves as a safety net.
Why It Exists
The Assigned Risk Plan ensures that all employers, regardless of their risk profile, have access to mandatory workers' compensation insurance. As of November 1, 2022, Oklahoma transitioned to a state-run assigned-risk plan administered by the Oklahoma Insurance Department (OID). NCCI was appointed as the third-party administrator for an initial three-year term.
Transition from CompSource
Previously, CompSource Mutual was responsible for the residual market. The transition to OID-administered oversight was fully completed by June 1, 2024.
Entry Requirements
Oklahoma employers must demonstrate that at least two unaffiliated insurers have declined to offer coverage at reasonable rates before being accepted into the residual market.
Key Characteristics
Businesses are assigned a servicing carrier by NCCI.
Rates are regulated and often higher than the voluntary market.
Underwriting flexibility and support services are limited.
Oklahoma-specific rating plans like LSRP and ARAP apply.
2. How the Assigned Risk Process Works in Oklahoma
Application and Assignment
To enter the Assigned Risk Plan, a business must submit an application—typically through a licensed agent—to NCCI. Upon approval, NCCI assigns the business to a servicing carrier. Oklahoma law requires documentation of two carrier declinations.
Rate Structure and Class Codes
Premiums are determined using:
Manual rates by class code
Experience Modifiers (E-Mods), if applicable
Oklahoma-specific assessments, surcharges, and taxes
Recent changes:
Effective January 1, 2025, NCCI filed a 9.2% decrease in loss costs following a 14.7% reduction that took effect June 1, 2024.
Assigned risk rates apply a 1.77 loss-cost multiplier in Oklahoma.
Experience Rating
If your business has sufficient claims history, NCCI applies an Experience Modifier. This can either improve or worsen your premium, based on past losses relative to peers.
Oklahoma-Specific Rating Plans
Loss Sensitive Rating Plan (LSRP): Required for policies ≥ $250K in premium; includes a 20% contingency deposit.
Assigned Risk Adjustment Program (ARAP): Surcharge up to ×1.49 based on risk performance.
Merit Rating, Deductible Options, and Construction Credit Premium Adjustment Program (CCPAP) also apply.
3. Challenges for Oklahoma Employers in the Pool
Being in the Assigned Risk Plan isn’t ideal for most employers. Key challenges include:
1. Higher Premiums
Due to limited underwriting flexibility, servicing carriers use standardized rates, often resulting in higher premiums. Oklahoma’s ARAP surcharge and LSRP plan can further increase costs.
2. Service Limitations
Servicing carriers typically offer fewer value-added services like claims consulting, return-to-work programs, or loss control.
3. Limited Market Influence
Employers in the pool have reduced bargaining power and less engagement from carriers.
4. Introduction to the Voluntary Coverage Assistance Program (VCAP)
VCAP is an NCCI initiative designed to help qualifying businesses exit the Assigned Risk Plan and return to the voluntary market.
What is VCAP
VCAP provides a streamlined path for agents and servicing carriers to refer strong prospects to voluntary insurers.
VCAP in Oklahoma
Oklahoma participates in VCAP automatically via NCCI’s RMAPS® portal. In 2024:
90 applications were processed in Oklahoma
71 received voluntary carrier matches
Only 2 transitioned into the voluntary market
Average premium savings was ~$84 (4.8%) per policy
Who Qualifies
Ideal candidates include:
Businesses with improving loss histories
Organizations investing in safety programs
Employers with professional risk management support
How It Works
NCCI and agents flag qualifying businesses
The account is referred to voluntary insurers
If accepted, the employer can exit the pool mid-term
5. How Oklahoma Employers Can Exit the Pool
Getting out of the pool requires proactive effort.
Steps to Exit
Improve Risk Profile: Invest in training, maintain a clean loss history, and implement formal safety policies.
Engage an Experienced Agent: Work with agents who understand Oklahoma's rating system and can access regional and national carriers.
Meet Entry & Exit Criteria: Ensure you’ve documented two declinations and assembled detailed underwriting info.
Submit to VCAP or Direct Markets: Allow your agent to explore voluntary options before renewal—or mid-term if possible.
Timeframes
Transitions can take several weeks. With VCAP, exits may happen mid-policy.
6. The Role of Insurance Agencies
The right insurance agency can make the difference between staying in the assigned risk pool or transitioning into a better program.
What a Proactive Oklahoma Agency Does:
Understands Oklahoma’s regulatory changes and unique rating plans
Educates clients on the residual market and available programs
Positions businesses for voluntary market eligibility
Maintains strong carrier relationships, especially regionally
How We Add Value
At Professional Insurors Agency, we specialize in Oklahoma employers. We combine access to multiple carriers with in-house safety services and detailed E-Mod analytics, helping our clients reduce risk, control costs, and regain market leverage.
7. FAQs
Q: Do I need to be declined by other insurers before entering the plan?
A: Yes. Oklahoma law requires at least two unaffiliated insurers to decline to offer reasonable coverage before NCCI can place you in the assigned risk plan.
Q: Can I get out of the assigned risk plan mid-policy?
A: Yes, through VCAP or a carrier willing to accept your business, subject to approval.
Q: Will I always pay more in the assigned risk pool?
A: Often yes, especially with LSRP or ARAP surcharges. Improving your risk profile is key to better pricing.
Q: Can I choose my servicing carrier?
A: No, NCCI assigns your carrier. However, once in the voluntary market, you can choose.
Q: How do ARAP and LSRP affect my costs?
A: They increase premium for underperforming risks but can be managed through better claims control and documentation.
Closing Thoughts
While Oklahoma’s Assigned Risk Plan serves a vital role, it should not be a permanent solution. With proper guidance and strategic risk management, your business can position itself to exit the pool and access lower rates, broader coverage, and better services.
Let us help you evaluate your placement and build a roadmap to exit the Oklahoma Assigned Risk Plan. Contact us today for a complimentary policy review and risk assessment.
Oklahoma-Specific References with Links
SB 524 – Assigned Risk Reform Legislation (2022)
Oklahoma Statutes § 36-608.2
https://law.justia.com/codes/oklahoma/2022/title-36/section-36-608-2/Oklahoma Insurance Department Bulletin No. 9-2022
(announcing the transition of the assigned risk plan to NCCI)
https://www.oid.ok.gov/bulletin-no-9-2022/NCCI Oklahoma State Advisory Forum Presentation (Rate Filings)
https://www.ncci.com/Articles/Documents/II_StateAdvisoryForumState_OK_2023.pdfNCCI Oklahoma Residual Market State Activity Report (2024 Q4)
https://www.ncci.com/Articles/Documents/RM_StateActivityReportState_OK_4Q24.pdfNCCI Oklahoma Residual Market Manual Instructions
https://www.ncci.com/Articles/Documents/RM_State_Instructions_OK.pdf
