Beacon Mutual Insurance Co., the state’s dominant workers’ compensation insurer, plans to reduce rates by an average of 16 percent.
The company, which has roughly 14,500 policyholders, says it expects the rate reduction to save Rhode Island employers about $9 million in coverage costs over 12 months.
Policyholders with premiums of $10,000 — mostly small businesses — are especially expected to benefit, the company said.
“We think that’s good news for the small business community in Rhode Island,” said Beacon spokesman Bill Fischer.
The reduction, Beacon’s first since 1998, will be effective as of Oct. 1.
Regulators approved the 16 percent reduction plan even though Attorney General Patrick Lynch, citing the company’s financial success, had sought a 34.5 percent cut. The state Department of Business Regulations plans to schedule a hearing on whether Beacon should make steeper rate cuts, saying the issues raised by Lynch “require further review and analysis.”
Gov. Don Carcieri said the rate reduction was “long overdue,” but added that the company “may have room to reduce rates even further.”
Policyholders under the new rate filing will pay about $1.95 per $100 of payroll. The current rate is $2.10 per $100 of payroll, Fischer said.
An audit report commissioned by the company and released in April found that Beacon improperly gave some clients and insurance agents price breaks.
In response, Beacon’s board of directors fired its then-CEO, Joseph A. Solomon, and several board members have also resigned.
State regulators and a statewide grand jury are now reviewing the company’s rate-setting policies.
Beacon Mutual is a non-profit independent corporation created by the state in 1991.
Topics Workers' Compensation
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