PCI Says N.Y. Workers’ Comp Benefit Increases Must Be Balanced with Reform

February 24, 2004

The New York Assembly Labor Committee on Tuesday reviewed a bill to introduce workers’ compensation benefit increases that industry experts and the New York Workers’ Compensation Rating Board reportedly fear will increase premiums by at least 25 percent.

“We don’t necessarily oppose workers’ comp benefit increases – New York has gone without them for more than a decade,” said Gerald Zimmerman, assistant vice president and regional manager for the Property Casualty Insurers Association of America (PCI). “But without balancing these increases with some means of reform, A.B. 9736 would stall whatever recovery we’ve seen in the New York economy and put the workers’ comp market in jeopardy.”

Zimmerman pointed out that even though the state’s weekly benefit levels are low, New York’s workers’ comp premiums are among the highest in the country due to the lack of a cap on permanent partial disability (PPD) benefits. “Although PPD claims account for only 12 percent of all reported comp claims, they account for 77 percent of the cost,” he said.

To help balance increased benefits, PCI recommends a durational cap on PPD, and the adoption of guidelines to establish objective medical protocols, such as those proposed by the American Medical Association, dealing with worker disability.

“The bottom line is, New York businesses must take a stand on this bill, or they will see their workers’ compensation premiums increase by at least 25 percent, according to the New York workers’ comp rating board,” Zimmerman said.

A total of 107 PCI members write workers’ comp insurance in New York, accounting for 30 percent of the private workers’ comp market.

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