Division of Insurance Reaches Settlement to Keep Workers' Compensation Rates at Current Levels
Massachusetts Businesses to Save $77 million
BOSTON— Thursday, March 20, 2014 - The Massachusetts Division of Insurance (DOI) has reached a settlement with the Workers’ Compensation Rating and Inspection Bureau (WCRIB) and the Attorney General’s Office that calls for a zero percent overall average rate change, effective April 1, 2014. Businesses across the state will save about $77 million as a result of this settlement.
The WCRIB originally filed in December for an industry-wide rate increase averaging 7.7 percent. After a month-long hearing process among DOI, the Attorney General and the WCRIB on behalf of its members, the three parties reached a settlement keeping rates virtually unchanged. As part of the settlement, the parties have agreed to modify the classification of certain employer groups to allow more accurate prediction of workers’ compensation losses. This adjustment may cause a small percentage of employers to see an adjustment in their rates. According to WCRIB, approximately 141,000 Massachusetts employers carry workers’ compensation coverage.
“Our aim when reviewing rate requests is to ensure affordability for those buying insurance while also maintaining a financially stable insurance market in the Commonwealth,” said Commissioner of Insurance Joseph G. Murphy. “This outcome meets those dual goals. As with every insurance line we regulate, Division staff entered this review committed to maintaining a fair and competitive market.”
Workers’ compensation rates were last raised in 2001 by one percent. Since then, rates have declined by nearly 25 percent. Ensuring that workers’ compensation insurance rates are not excessive is consistent with the Patrick Administration’s broad efforts to contain insurance costs for consumers and businesses across the Commonwealth. Whether it’s keeping health insurance base rates low or reforming the private passenger auto insurance system, the Patrick Administration’s work has delivered millions of dollars in savings for Massachusetts consumers.
Workers’ compensation insurance provides for lost wages and medical care for workers injured on the job. The workers’ compensation system in Massachusetts was overhauled in 1991 to emphasize efficient claims management, workplace safety, and dynamic return-to-work programs. Since 2011, the Patrick Administration has saved Massachusetts businesses $342 million through workers compensation rate decisions by the Division of Insurance.