May 31, 2001
FOR IMMEDIATE RELEASE
CONTACT: CAROL LANIGAN, 573-7308 OR
Major Workers' Compensation Rate Hearing Ends
(BOSTON, MA) A workers' compensation rate hearing that will affect most employers ended today with the action of the Commissioner of Insurance. Commissioner Linda Ruthardt approved an agreement reached between the State Rating Bureau (SRB) and the Workers' Compensation Rating and Inspection Bureau (WCRB). The agreement is for an overall average increase of 1%, and becomes effective July 1, 2001 for the WCRB insurers' customers. This means that basic rates available to employers remain less than those in place in 1993 when the positive results of the Weld-Cellucci reforms were just beginning to be realized. The cumulative rate change since 1994 is a decrease of 58%. The WCRB had sought an overall average increase of 7.7% (approximately $55 million) to be effective no later than September 1, 2001. The approved increase is estimated to be approximately $7 million.
Not all employers will see a 1% increase in their rates. Workers' Compensation basic ("manual") rates are based on what a business does. During the next few weeks the actual manual rates for each classification/job type will be calculated. Some will have increases greater than 1%; and some, decreases. It is important for employers to assure themselves that their insurance agents and brokers seek out competitive rates.
Right now more than 60 insurers are offering discounts of up to 35% to some or all of their Massachusetts customers. These credits will not automatically continue after July 1, 2001. Insurers who want to continue to offer discounts will apply to the Division of Insurance for permission. The Division of Insurance's website will again list all such approved credits to help employers find the coverage they need at the lowest price.
In a separate rate case which is still being heard and is unaffected by today's action, Eastern Casualty Insurance Company is seeking an average rate increase of 11.6% for the manual rates it will use on polices it sells on or after July 1, 2001.