On Friday March 21, the Division of Insurance announced that there would be no overall average rate change for worker’s compensation rates in the Commonwealth in 2014. On behalf of its members, The Worker’s Compensation Rating & Inspection Bureau of Massachusetts (WCRIBMA) had filed a request on December 27, 2013 to increase the overall rate by 7.7%.
After a month of hearings involving the Attorney General’s Office, the State Rating Bureau and the WCRIB, the parties executed a stipulation on March 20, 2014 representing the negotiated settlement of matters between the parties. In that agreement, it states that while there will be no overall statewide increase in the rate change for worker’s compensation rates, the majority of individual class rates will change.
- These rates, classifications, rating programs, rating plans, rating factors and rating values shall apply to new and renewal policies effective on and after April 1, 2014, including all such policies in the Massachusetts Workers’ Compensation Assigned Risk Pool;
- The new classification pricing methodology proposed by the WCRIB in Section IX of the Filing shall be approved for use in setting rates to be effective on and after April 1, 2014, provided that the “swing limits” applicable to the rates for individual rating classifications shall be those displayed in Exhibit I to the Stipulation;
- The Massachusetts Construction Classification Premium Adjustment Program (“Construction Credit Program”), described in Section XI-F of the Filing shall be approved for use in setting rates to be effective on and after April 1, 2014, provided that the credit percentages appearing on page XI-15 of the Filing are revised as shown in Exhibit II to the Stipulation. To preserve the revenue
neutrality of the Construction Credit Program, the offset in the rates to be effective on and after April 1, 2014 shall be .968;
- Because the Stipulation provides for no change in statewide average rates, the implementation of the classification pricing methodology referred to in Paragraph 3 of the Stipulation and the revised Construction Credit Program referred to in Paragraph 4, the manual rates for most classifications and various experience rating and retrospective rating factors will change effective April 1, 2014. Revised manual pages reflecting the provisions of the Stipulation that are
applicable to new and renewal policies effective on and after April 1, 2014 are attached to the Stipulation as Exhibit III;
- The WCRIB, in collaboration with the AG and the SRB, shall develop and implement a survey to obtain adequate data relating to commission payments on large deductible and retrospectively rated policies and data on the allocation in such policies of loss adjustment expenses between insurers and policyholders;
The WCRIBMA has also issued Circular Letter No. 2236 outlining the general revision of rates for new and renewal policies in response to the Division’s decision and the stipulated agreement between the parties.