The Massachusetts Division of Insurance (DOI) announced Friday it has reached a settlement with the Workers’ Compensation Rating and Inspection Bureau (WCRIB) and the Massachusetts Attorney General’s office to keep the state’s workers’ comp rates at current levels.
The WCRIB originally filed in December to raise the state’s average worker’s comp rate by 7.7 percent. By keeping the rates at current levels, businesses across the state will save about $77 million, according to the announcement.
Rates for workers’ comp insurance are set at least every other year in an administrative rate hearing before the state’s insurance commissioner.
After a month-long hearing process among DOI, the Attorney General and the WCRIB on behalf of its members, the three parties reached a settlement keeping rates virtually unchanged, according to the announcement.
As part of the settlement, the parties have agreed to modify the classification of certain employer groups to allow more accurate prediction of workers’ comp losses. Officials said this adjustment may cause fewer than 2 percent of employers to see an adjustment in their rates. According to WCRIB, approximately 141,000 Massachusetts employers carry workers’ comp coverage.
“Our aim when reviewing rate requests is to ensure affordability for those buying insurance while also maintaining a financially stable insurance market in the Commonwealth,” Massachusetts Insurance Commissioner Joseph G. Murphy said in a statement.
“This outcome meets those dual goals,” Commissioner Murphy said. “As with every insurance line we regulate, Division staff entered this review committed to maintaining a fair and competitive market.”
Workers’ comp rates were last raised in 2001 by one percent. Since then, rates have declined by nearly 25 percent, according to the announcement.
DOI said ensuring that workers’ comp insurance rates are not excessive is consistent with Massachusetts Gov. Deval Patrick administration’s broad efforts to contain insurance costs for consumers and businesses across the state.
Source: The Massachusetts Division of Insurance
- Mass. AG Office Says 7.7% Workers’ Comp Rate Hike Unnecessary
- Workers’ Compensation Benefits, Employer Costs Rise: Study