NC Workers Comp Loss Costs: Contracting Cut Isn't a Mod Cut
NCRB filed an 11.7% contracting loss-cost cut and a 15.3% residual cut for April 1, 2027. The catch: expected losses refile too, so the mod can give part back.
NC workers comp loss costs would drop 11.7% for contracting under NCRB C-26-7, filed August 31, 2026, for April 1, 2027 policies (NCRB C-26-7, August 2026). Residual contracting rates would fall 15.3% (NCRB C-26-6, August 2026). The EMR doesn't automatically fall because expected losses and rating values refile with the loss costs.
North Carolina's new filing looks like the kind of news that lets a construction CFO relax. It isn't that simple. NC workers comp loss costs can fall while the Experience Modification Rate (EMR, the mod) keeps pressure on the bill.
The North Carolina Rate Bureau (NCRB) filed C-26-7 on August 31, 2026, with advisory loss costs for policies effective April 1, 2027 (NCRB C-26-7, August 2026). Statewide loss costs would fall 10.6%, and contracting would fall 11.7% (NCRB C-26-7, August 2026). Residual rates would fall 14.3% overall and 15.3% for contracting (NCRB C-26-6, August 2026).
For assigned-risk contractors, the filing is real money. But a cheaper base is not the same thing as a cleaner mod.
Why NC workers comp loss costs are not a mod cut
NCRB's own wording matters. The prospective advisory loss costs "include no provisions for expenses, dividends, profit or contingencies" (NCRB C-26-7, August 2026). In plain English, this is the claim-cost layer, not the whole policy price.
On a voluntary policy, the carrier still applies its loss-cost multiplier (LCM), schedule rating, payroll, class mix, and your experience modification rate. C-25-11 says a carrier with an on-file LCM can let approved loss costs take effect without another filing, while a carrier changing its multiplier must file before the effective date (NCRB C-25-11, October 2025). The 11.7% is applied before those account-specific layers do their work.
Last year's approved voluntary filing was a 7.8% average decrease effective April 1, 2026 (NCRB C-25-11, October 2025), while the submitted industry schedule showed contracting down 9.0% (NCRB C-25-8, September 2025). This year's contracting proposal is deeper.
The assigned-risk cut is bigger, and narrower
C-26-6 proposes a 14.3% average decrease in North Carolina's residual market premium level, including the 10.6% loss-cost decrease (NCRB C-26-6, August 2026). Contracting comes in at 15.3% (NCRB C-26-6, August 2026). Last year's residual filing proposed 7.6% overall and 8.8% for contracting, then was approved as filed for April 1, 2026 (NCRB C-25-7, September 2025; NCRB C-25-10, October 2025).
For an NC trade account still assigned risk, that difference is not cosmetic. On a $50,000 current contracting premium, an 11.7% voluntary loss-cost decrease is about $5,850 before other changes ($50,000 x 11.7%; NCRB C-26-7, August 2026). The 15.3% residual contracting decrease is about $7,650 on the same base ($50,000 x 15.3%; NCRB C-26-6, August 2026).
That is the residual placement problem in one renewal. A bigger filed cut helps. It doesn't cure the reason the account got placed there.
Expected losses move too
The EMR is not calculated from your paid premium. It compares actual losses with expected losses for your classifications and payroll. When the bureau refiles loss costs, it also refiles rating values. C-26-7 covers advisory loss costs, rating values, and miscellaneous values for April 1, 2027 policies (NCRB C-26-7, August 2026). C-25-11 says the prior approved changes included experience rating plan changes (NCRB C-25-11, October 2025).
That is the part contractors miss. A lower class loss cost can reduce manual premium, but the Expected Loss Rate (ELR) used in mod math can also change. If a class is improving faster than your own loss history, your expected losses may fall along with the market. Your old claims don't fall just because the table did.
In our reviews of Southeast contractor worksheets, this is where budgets get surprised. A CFO sees contracting down 11.7% and builds the renewal around that number. Then a reserve from the valuation date, a payroll shift into a worse class, or an ELR reset keeps the EMR from giving the full cut back. The pass-through is conditional.
If you want a rough account-level swing, the workers' comp premium formula is still the cleanest frame: payroll times rate, modified by the mod and carrier factors. A contractor can use an EMR calculator to price the distance between a 1.12 mod and a 1.02 mod, but the filing itself won't tell you which number is supported.
What an audit would check
An audit checks whether the April 1, 2027 filing actually reached the renewal and whether the worksheet above it reflects accurate claim and payroll data. It reads the class mix against the work performed in North Carolina and weighs whether claim values or expected-loss changes overstate account performance. For assigned-risk contractors, it also separates price relief from placement risk.
Send us your North Carolina worksheet and we'll review it for free before the 2027 filing reaches your renewal.