For Immediate Release - July 11, 2012

Division of Insurance Rejects Request for 18.8 Percent Increase in Workers' Compensation Rates, Rates for September 1 to Stay Unchanged

Decision Saves Massachusetts Employers $200 Million in Premiums

August 30, 2012 - Boston - The Patrick-Murray Administration's Division of Insurance today disapproved a request from the Workers' Compensation Rating and Inspection Bureau to increase Massachusetts workers' compensation rates by 18.8 percent, meaning rates will be unchanged and businesses will save an estimated $200 million on projected premium increases.

The decision and order follow a five-month hearing process that included statements from the public, testimony from experts and cross examination of witnesses.

"After analyzing the wealth of data and information presented during the case, we found insufficient support for such a significant increase," said Joseph G. Murphy, Commissioner of Insurance. "No matter which of the products we regulate, the Division of Insurance expects insurers to make a compelling case to justify their proposed rates. Our staff's scrutiny of every proposal is thorough and detailed, and carefully balances industry solvency with fairness to consumers."

The rejection of this double-digit rate increase is consistent with the Patrick-Murray Administration's on-going efforts to contain sky-rocketing costs for insurance coverage. Governor Deval Patrick's health care cost-containment initiatives have already saved small businesses and working families hundreds of millions of dollars over the past two years, with more to come after Governor Patrick signed cost-containment legislation passed in July. The Administration's four-year-old reform of the auto insurance system has bolstered the marketplace, including adding 13 new companies to Massachusetts from 19 in 2008, while delivering millions of dollars in savings annually to drivers who shop around for the best price on the coverage they need.

Workers' compensation insurance provides coverage for, among other things, lost wages and medical care for workers injured on the job. Massachusetts businesses are required to carry workers' compensation insurance. The Division of Insurance approves or disapproves filings for proposed rates through a rate-review proceeding.

The workers' compensation system was overhauled in 1991, with the focus on efficient claims management, workplace safety, and return-to-work programs. Rates have been cut 19.7 percent by the Patrick-Murray Administration, and studies by the Oregon Department of Consumer and Business Services have found Massachusetts has some of the lowest workers' compensation rates in the country. Including today's decision, since 2010, an estimated $287.5 million has been saved for businesses through rate decisions by the Division of Insurance.

The Division of Insurance is an agency within the Office of Consumer Affairs and Business Regulation. Follow the Division at www.mass.gov/doi or its Twitter feed, @MassDOI. OCA provides a range of consumer information at www.mass.gov/consumer, on Facebook and Twitter @Mass_Consumer.

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