August 25, 1999
FOR IMMEDIATE RELEASE
CONTACT: CHRISTOPHER GOETCHEUS
Cellucci, Swift Hail 20.3 Percent Drop In Workers' Comp Rates
Since 1993, reforms save businesses more than $1 billion in premiums
(BOSTON, MA) Governor Paul Cellucci and Lieutenant Governor Jane Swift today announced the fifth consecutive double-digit decrease in Massachusetts workers' compensation insurance rates. The 20.3 percent decline, effective September 1, signals the continued success of the Administration's efforts to strengthen the state's economy.
"The high cost of workers' compensation was once a great deterrent to improving the business climate in Massachusetts, but five years of substantial rate cuts have turned that around," Cellucci said. "Reforming our workers' compensation system, coupled with more than two dozen tax cuts, have resulted in a strong economy in which companies thrive," "Before reform, claims were sky-high and compensation levels discouraged workers from returning to their jobs," Swift said. "Today, employees and employers benefit from a booming marketplace unburdened by exorbitant insurance costs."
The 20.3 percent decrease in the average rate, ordered by Insurance Commissioner Linda L. Ruthardt, will result in an estimated $170 million in savings for employers. This decrease translates into an overall rate reduction of 59 percent since 1993, and an estimated premium savings of more than $1 billion since the Weld-Cellucci Workers' Compensation Reform Act took affect.
The Weld-Cellucci Workers' Compensation Reform Act of 1991 was the driving force in reducing rates by removing unnecessary costs from the system, ending the disputed case backlog by streamlining the Department of Industrial Accidents, and creating incentives for employers to improve workplace safety which ultimately reduced claims.
Insurance Commissioner Ruthardt said, " I am pleased to see that the evidence presented in the case indicated that safety and return to work programs were continuing to be successful." Following a 6.24 percent increase in the average rate in January 1993, workers' compensation insurance rates have fallen by double digits in each of the previous four rate cases: 10.2 percent in January 1994, 16.5 percent in January 1995, 12.2 percent in May 1996 and 21.1 percent in February 1998.