While William Weld was governor of Massachusetts from 1991 to 1997, Massachusetts succeeded in turning around a workers’ compensation system that was headed in the wrong direction.
In fact, many in the insurance industry consider workers’ comp reform to be his administration’s greatest insurance achievement, according to a report in Insurance Journal.
According to the story in the Oct. 3 East edition of Insurance Journal magazine, Weld’s tenure in the Bay State from 1991 to 1997 was marked by three key insurance issues in addition to the dramatic improvement in workers’ comp: the controversial relocation of Electric Mutual Liability Insurance Co., a General Electric subsidiary, to Bermuda; the precedent-setting demutualization of State Mutual Life; and modest competition in the state-controlled private passenger auto insurance system.
New York voters face the prospect of a race for governor next year between Democrat Eliot Spitzer, the state’s high-profile attorney general, and Republican Weld, a native New Yorker who is less well known by Empire State voters or insurance leaders.
The story on Weld is part of a series that continues in the Oct. 17 issue of Insurance Journal with a look at how insurance issues might be handled if Spitzer is elected by New York voters.
The Democratic legislature passed a strong workers’ comp reform measure and Weld signed it into law shortly after taking office in early 1991. The legislation aimed to cut costs by reducing benefits, streamlining claims administration and introducing incentives for workplace safety plans.
By most accounts, it worked spectacularly. Following a 6.24 percent increase in January 1993, workers’ comp rates fell by double digits in each of the next four years: 10.2 percent in January 1994, 16.5 percent in January 1995, 12.2 percent in May 1996 and 21.1 percent in February 1998.
The voluntary market for coverage returned, the assigned risk plan was depopulated, case backlogs were reduced and workers’ comp news faded from the front pages.
“Before the reforms, the market was bad. There was a significant amount of business in the assigned risk pool. It was just like the auto market is now. The workers comp reforms brought more business into the voluntary market and there was some actual competition,” said Frank Mancini, who heads the state’s independent insurance agents’ association, the Massachusetts Association of Insurance Agents.
In the area of auto insurance, Weld did not achieve any major changes but his administration is remembered for reviving some semblance of competition, largely through liberal approval of discounts for affinity and employer-based groups.
His insurance commissioner, Linda Ruthardt, encouraged discounts for members of groups ranging from patrons of a Cape Cod library and employees of Raytheon to members of the American Automobile Association and educators at various schools, despite objections by Mancini’s agents’ group.
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