Workers’ compensation insurers and the state regulator have agreed upon a 16.9 percent average decrease in workers’ compensation rates in Massachusetts starting Sept. 1, 2007.
The industry’s Workers’ Compensation Rating and Inspection Bureau of Massachusetts (WCRIB) had submitted a bid for a 13.4 percent rate decrease. Insurance Commissioner Nonnie Burnes held a public hearing on that filing on April 5.
The Commonwealth’s workers’ compensation rates have declined more than 60 percent from what they were1991 when a reform law was passed, according to WCRIB.
Paul Meagher, president of WCRIB, said insurers believe this decision is beneficial to employers, but warned about maintaining a stable marketplace.
“While this latest decrease is good news for employers, unchecked rising medical and pharmaceutical costs could erode these gains and lead to future rate inadequacy,” he cautioned.
He noted that the residual market, which insured 4 percent of the market in 1999, today insures 15 percent, making it the state’s second-largest workers’ compensation insurer.
Insurers said the time has come for the state to allow insurers more pricing flexibility.
“Rates are coming down because insurers, employers, workers and regulators have worked hard to make safer workplaces,” said John Murphy, American Insurance Association vice president, Northeast Region. “This is the ideal environment in which to move Massachusetts to a competitive rating system like those in 39 other states.”
AIA is supporting legislation (H. 1840) that would install a loss cost rating system used in all the other New England states and which supporters say encourages insurers to compete for their business.
“In a competitive loss cost system insurers compete with a combination of loss control services, claims services and price which reflects their costs. More efficient companies are able to pass on savings to customers,” said Murphy.
Topics Trends Carriers Workers' Compensation Pricing Trends Massachusetts
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