Workers’ Comp Rates Reduced in Oklahoma

The Oklahoma State Board for Property and Casualty Rates, chaired by Insurance Commissioner Carroll Fisher, voted to reduce the loss cost component of workers’ compensation rates by 2 percent. The reduction is scheduled to go into effect Jan. 1, 2003.

The National Council on Compensation Insurance, which represents the workers’ compensation insurance industry, had requested a 0.6 percent increase, but a rate reduction was instead recommended by actuaries reviewing the case. According to the insurance department, the reduction is expected to save employers statewide $6.7 million.

In September, the board approved a hike in the loss cost component based on increases in benefits paid to insured workers. The recently approved filing approved recognizes a reduction in the number of work-related injuries.

“We’re glad to be able to offer Oklahoma employers some hope on their workers’ compensation rates,” Fisher said. “Although we have seen an increase in some costs, employers will benefit from a reduction in the number of injured workers.”

Officials with the NCCI said that while medical costs are increasing, the number of injured workers has declined. Board members were told the number of injuries tends to decline in economic downturns, but increase after employers begin hiring new and inexperienced workers.

During discussion on the proposed decrease, board members expressed concern that the state’s workers’ compensation system needs continued reform. Officials representing industry groups said they would encourage the legislature to enact reforms, particularly in areas dealing with soft tissue injuries, mediation and drug and alcohol testing.

Insurance companies will use the loss cost component in order establish their own rates. In addition to costs relating directly to losses, they must include administrative costs as well as income they receive from investments.