In a joint effort announced today, the Attorney General for Massachusetts, Martha Coakley and the State Rating Bureau of the Massachusetts Division of Insurance, announced that they have brokered an agreement with insurers in the Commonwealth to ensure that worker’s compensation rates will remain flat until at least September 2012. The Workers’ Compensation Rating and Inspection Bureau of Massachusetts (WCRIBMA) had requested a general revision of workers’ compensation insurance risks and premiums which the Attorney General’s office said had been a request by the industry to raise rates on average by 6.6%, costing Massachusetts businesses approximately $65 million.
“The industry’s request to raise rates could not have come at a worse time for small businesses in Massachusetts,” said Attorney General Coakley. “We told the industry that we believed the rate was unjustified and that we would litigate to stop it. Blocking the rate increase helps ensure that businesses do not overpay for workers compensation insurance.”
Massachusetts is not the only state, however, that is dealing with this issue. As reported today in the Claims Journal, Washington State is also dealing with the issue of workers’ compensation. Workers’ compensation in Washington is a closed-looped insurance system in which businesses pay payroll taxes and the state invests the money. The State Legislature there are planning to tackle this issue in the Legislature because of fears that it is at risk of going bankrupt. Currently, the state’s accident fund is in the red for $275 million.
In turn, rates for worker’s compensation in Massachusetts are set at least every other year in an administrative rate hearing before the Commissioner of Insurance. All businesses in Massachusetts are required to purchase workers’ compensation insurance, which provides coverage for expenses and lost wages of workers injured on the job. Negotiations for a resolution between the state agencies and the industry have been ongoing since last month when the industry rate filing for these proposed increases were provided to both the Attorney General and the State Rating Bureau.
The settlement in the rate case along with a copy of the industry filing were submitted to the Division of Insurance today. Commissioner of Insurance Joseph G. Murphy will hold a public hearing on this issue on March 30, 2011 prior to making any final approval. Persons interested in presenting unsworn oral or written statements on March 30, 2011 are asked by the Division of Insurance to submit a notice of intent to do so, no later than March 28, 2011. Anyone interested in presenting data at the hearing are requested to present it to the Division of Insurance no later than March 23, 2011. The Docket No. for this issue is Docket No. R2011-0.
