Worker’s compensation rates will hold steady in the Commonwealth throughout at least September 2012. The Commission of Insurance, Joseph G. Murphy signed the agreement yesterday guaranteeing the rate freeze and savings of approximately $65 million for Massachusetts businesses. The Workers’ Compensation Rating and Inspection Bureau (WCRIB) had originally proposed for an overall 6.6 percent increase in workers’ compensation rates but agreed to the rate freeze after negotiations with the Attorney General’s office and the Division of Insurance.
The WCRIB of Massachusetts is a private non-profit unincorporated association of insurers that is licensed by the Massachusetts Division of Insurance as a rating organization for workers’ compensation insurance in Massachusetts.
Massachusetts law requires that “any insurance company writing workers’ compensation insurance in the Commonwealth to file its risk classifications and premiums with the Commissioner, either directly or through a rating organization authorized to act on its behalf. The Commissioner thereafter conducts a hearing to determine whether the classifications and rates are not excessive, inadequate or unfairly discriminatory for the risks to which they effectively apply, and fall within a range of reasonableness.”
After conducting a rate hearing regarding the rates, Commissioner Murphy approved the rate hold stating, “Our goal at the Division of Insurance is to make sure that these rates are fair, they protect workers, and that they do not overly burden employers. This agreement does all those things.”
The Division of Insurance also said that last year, an agreement with WCRIB cut overall rates 2.4 percent, instead of increasing them 4.5 percent as originally requested. That agreement also saved approximately $65 million in annual workers’ compensation insurance premiums. Traditionally, WCRIB files rates proposals every two years, but last year’s agreement included a required filing in the next year.
Governor Patrick’s Undersecretary of the Office of Consumer Affairs and Business Regulation was pleased with the decision to hold rates down. “This is good news for businesses in Massachusetts, particularly small businesses which are the engines of our ongoing economic recovery.”
Workers’ compensation insurance is mandatory for business in the Commonwealth which provides coverage for lost wages, permanent injuries, and medical care for workers injured on the job. The workers’ compensation system was overhauled in 1991, with a renewed focus on creating a more efficient claims management process, workplace safety and return-to-work programs. The Division of Insurance sets workers’ compensation rates through a rate-setting proceeding.
A copy of the Division of Insurance’s decision can be accessed here.
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