August 29, 2003: Insurance Commissioner Bowler Rejects Insurers' Workers' Compensation Rate Request

(Boston, MA) Massachusetts Insurance Commissioner Julianne M. Bowler today issued a decision in the 2003 workers' compensation rate setting proceeding that will result in an overall average decrease in the rates insurers charge employers for workers' compensation insurance coverage effective September 1st. The 4.0% cut in the average rate represents a premium savings of $35 million off of the current rates established in May 2001.

"Our market continues to be a healthy one. Based on the evidence presented, a modest decrease is warranted and will preserve stability," said Commissioner Bowler.

On July 24th, the Commissioner approved an agreement between the State Rating Bureau, Attorney General and the Workers' Compensation Rating and Inspection Bureau on several disputed issues in the rate case, which had the effect of slightly narrowing the large disparity in the rate requests of the insurers (+8.6%) and the Attorney General (-21.4%).

"Our goal must be to ensure that rates are reasonable, not excessive or inadequate. This decision ensures that employers are getting a fair value and rate adequacy is maintained for insurers," Bowler said.

Many employers realize further reductions in their workers' compensation premiums as a result of a competitive market for discounts and credits. Currently, more than 50 insurers offer discounts of up to 35% to Massachusetts employers. Such incentives for efficient claims management, workplace safety and return to work programs grew out of the Workers' Compensation Reform Act of 1991, a series of reforms that have been heralded nationally and serve as a model for states with distressed workers' compensation markets.