AUGUSTA (AP) – Action by Maine insurance regulators paves the way for workers’ compensation rate increases starting Jan. 1 for companies that write policies covering injured workers in the state.

The state Bureau of Insurance said Tuesday it reduced a rate-hike request by an insurance rating organization, the National Council on Compensation Insurance, from 1.8 percent to 1.2 percent.

The industry uses that figure, which reflects loss costs, to calculate its final rates after taking other factors into account.

Insurance Superintendent Alessandro Iuppa said he anticipates rate increases as a result will be in the 1.2 percent range.

“Although on face value the change in the requested increase is relatively small, the reduction is expected to save employers approximately $1.6 million on policies issued or renewed in 2006,” Iuppa said.

Iuppa added that the actual increase or decrease in a particular employer’s premium will vary from the average, depending on the industry classification. New rates will be effective as of Jan. 1.

The frequency of lost time claims in Maine has continued to decrease since 2000, but the average cost per case for both wage loss and medical benefits has increased, offsetting claims savings, the Insurance Bureau said.

While more than 100 companies are licensed to write workers’ compensation policies in Maine, only about 20 actively do so, Iuppa said.

The largest by far is Maine Employers Mutual Insurance Co. MEMIC insures more than 21,000 employers and their estimated 200,000 employees.

MEMIC was created in January 1993 as part of a reform package approved by the Legislature.