AG Reaches Settlement Saving Businesses $75 Million in Proposed Workers’ Compensation Rates
AG’s Office Argued Against Proposed Increase Before Commissioner of Insurance
BOSTON – Massachusetts businesses will save $75 million in a deal reached with the State Rating Bureau and the Workers Compensation Rating and Inspection Bureau (WCRIB) that prevents a proposed plan to increase workers’ compensation insurance rates by an average of 7.7 percent across the state, Attorney General Martha Coakley announced today.
Following opposition from AG Coakley against the increase initially proposed by the insurance industry, the Commissioner of Insurance approved the settlement today that eliminates the industry’s proposed plan for increases, saving Massachusetts employers, including small businesses, a total of $75 million.
In January, the AG’s Office argued before the Commissioner of Insurance that the rate request was unjustified because it was based almost primarily on an increased profit load.
“As the Commonwealth continues to address high unemployment, this is not the time to unfairly increase these costs for the private sector, especially for the small business community,” AG Coakley said. “We believe the proposed rate hike was completely unjustified and are pleased to see that rates will now be applied more fairly.”
Rates for workers compensation insurance are set at least every other year in an administrative rate hearing before the Commissioner of Insurance. Massachusetts businesses are required to purchase workers compensation insurance to provide coverage for expenses and lost wages of workers injured on the job.
Through the industry trade group, WCRIB, insurance companies including giants Liberty Insurance, AIG, Traveler’s Insurance Co., and other insurers planned the proposed rate hike and sought approval from the Commissioner of Insurance.
In 2012, the AG’s Office successfully blocked a previous unjustified attempt by insurers to hike rates for Massachusetts businesses by an extra $175 million. In order to stop the rate hike, the AG’s Office litigated the matter through an administrative rate trial, which ended with a decision that rejected the proposed rate hike in its entirety.
The Attorney General’s Insurance and Financial Services Division represents the public interest in these rate trials, and advocates for fair rates for insurance customers. Since 2007, the AG’s Office obtained helped employers and small businesses save hundreds of millions of dollars by intervening in workers’ compensation insurance administrative rate cases.
This matter was handled by the experts and attorneys of the Attorney General’s Insurance and Financial Services Division.
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