The Workers’ Compensation Reinsurance Association (WCRA) announced it is reducing the reinsurance rates it charges to self-insured Minnesota employers and insurance companies by an average of 12 percent.
The rate reductions have been adopted by the WCRA Board of Directors and approved by Minnesota Commissioner of Labor and Industry Shirley Chase. The rate reductions will range from five percent to 19 percent depending on the retention limit selected by each insurer or self-insured employer.
Carl Cummins, acting WCRA president, said that the association is able to reduce its rates because they are based solely on the workers’ compensation claims experience of Minnesota employers. “Global reinsurance markets have been hardening through much of this year and, since the events of Sept. 11, industry sources indicate that private reinsurers are raising rates by 10 percent to 80 percent.”
Minnesota law requires all workers’ compensation insurers and all self-insured employers to purchase reinsurance coverage for large claims from the WCRA, a not-for-profit, tax-exempt association created by the Legislature in 1979. Cummins noted that one of the reasons the WCRA was formed was to ensure the reliable availability of workers’ compensation reinsurance in the state. “These reduced WCRA reinsurance rates will help stabilize the workers’ compensation insurance market for Minnesota employers at a time when there is great instability in the national property and casualty insurance markets.”
The WCRA also announced that it will continue to provide reinsurance coverage for any future terrorism losses. Last week, the Minnesota Department of Commerce said it would approve commercial insurance policies that exclude terrorism coverage.
According to state law, the WCRA is required to provide 100 percent indemnification for losses sustained by its members in each loss occurrence in excess of the retention limit selected by each member. Cummins said, “By continuing to provide reinsurance for losses resulting from [terrorist] acts, the WCRA will provide greater stability in the Minnesota workers’ compensation market than in many other states by helping to ensure that insurance coverage is available for Minnesota employers.”
Topics Workers' Compensation Pricing Trends Reinsurance Minnesota
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