Massachusetts Insurance Commissioner Michael Caljouw has rejected an industry proposal to raise workers’ compensation rates by 7.1%.
As a result, existing rates, which reflect a 14.6% decrease ordered last July, will remain in effect for policies on and after July 1, 2025.
The ruling is a setback for the industry’s rate filing organization, the Workers’ Compensation Rating and Inspection Bureau (WCRIB), which criticized last year’s decrease as “excessive” and “unreasonable.” The 2024 reduction was nearly double what the WCRIB recommended (-7.6%) for a cut.
WCRIB warned that the 2024 decrease would lead to rates that would be inadequate as further post-COVID pandemic data emerged. The rate organization said that if the state had approved the 7.6% decrease it proposed for 2024, this year’s rate filing would have been for a relatively small rate decrease of 1.0%.
Massachusetts Weighs Workers’ Comp Rate Hike to Correct for ‘Excessive’ 2024 Cut
“Thus, rather than being able to maintain a more modest rate decrease for two years, the data now points to a rate increase to correct for the excessive decrease ordered” by the commissioner for 2024, the rating agency argued.
Despite the warning, the state has now rejected the WCRIB filing made in December for a 7.1% increase starting July 1, 2025.
State officials said the denial of the 7.1% increase could save employers $80 million, while last year’s decrease saved $87 million.
The rate approval process includes hearings with testimony from WCRIB, the Division of Insurance’s own rating bureau, and the attorney general’s office. This year the attorney general recommended an average rate decrease of -6.2 % and the state rating bureau proposed a decrease for standard classifications of between -3.1 and -2.1%, and between -7.6% and -6.7% for the F-classes.
While the commissioner has the authority to set a specific rate after disapproving a rate filing, Caljouw opted to keep existing rates in effect. rather than order any change.
The commissioner is tasked with determining if WCRIB submitted sufficient evidence to show that the proposed rates will not be inadequate, excessive or unfairly discriminatory and that they fall within a range of reasonableness. He concluded that the evidence did not support approval of the requested rate increase, citing questions over the provisions for loss development and underwriting profit among others.
The 2025 decision noted that insurers’ investments in technology made five years ago “successfully enabled them to maintain their level of pre-COVID business operations and simultaneously demonstrated that virtual methods can improve efficiency and save costs.” As a result, insurers have developed protocols for identifying situations in which, for example, telemedicine may be inappropriate or an onsite audit is preferable.
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