Insurance Commissioner Bowler Approves 3% Workers' Compensation Rate Cut
Governor Romney applauds $32 million savings for Massachusetts employers
The new rate takes effect in September and was the result of an agreement reached between the Division of Insurance's State Rating Bureau, the Workers Compensation Rating and Inspection Bureau ("WCRIB") and the Attorney General's office.
"I am committed to lowering costs for Massachusetts employers so that we can continue the positive growth of the past year. I want to congratulate Commissioner Bowler and her staff for the work that went into this settlement, which will mean millions of dollars in savings for our business community," said Governor Romney.
The 3.0% rate cut is the seventh rate reduction since 1994 and reflects a cumulative rate decrease of over 60% in that time. The rate history demonstrates that Massachusetts' workers' compensation programs for efficient claims management, workplace safety and return-to-work continue to serve as models for what states with distressed workers' compensation markets can do to improve their own business climates.
Many employers realize further reductions in workers' compensation premiums as a result of a competitive market for discounts and credits. Currently, more than 30 insurers offer discounts of up to 30% to employers. Insurers will decide to what extent to continue or change their current discounting practices shortly after September 1, 2005.
In a related matter, Commissioner Bowler directed the WCRIB on May 12 th to take necessary steps to improve the quality of data that will be used in future rate cases, which will include periodic independent data audits and reports on the outcome of those audits to the Division of Insurance. A hearing held in February to address irregularities in workers' compensation data for American International Group and it subsidiaries remains open, as the State Rating Bureau continues to review the insurer's reported data. The new rate approved today will also be used by AIG and its subsidiaries.