The proposed 18.8 percent rate increase, revised from the original 19.5 percent, was to have taken effect this month
The Commissioner of Insurance Joseph Murphy has rejected the Workers’ Compensation Rating and Inspection Bureau’s (WCRIB) request to increase worker’s compensation rates. Under the auspices of Massachusetts law, the Commissioner has the authority pursuant to G.L. c. 152 Section 52 to “disapprove rates or withdraw his approval only if rates are inadequate, excessive or unfairly discriminatory” via a “range of reasonableness.”
“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 Division says that as a result of its decision, Massachusetts employer’s will save approximately $200 million in premiums.
Attorney General Martha Coakley who argued that the WCRIB’s rate increase would greatly increase the cost of doing business in Massachusetts and have a dampening effect on overall employment in the state praised the decision.
“The industry’s request to raise rates could not have come at a worse time for small businesses in Massachusetts,” AG Coakley said. “We believed the proposed rate hike was completely unjustified, and we litigated to stop it. Blocking the rate increase helps ensure that companies’ do not overpay for workers compensation insurance, reducing the cost of doing business here in Massachusetts. We applaud the Division of Insurance for this decision today.”
While the Attorney General had opposed the rate increase, representatives from both the MAIA and the Massachusetts Insurance Federation as well as independent agent Geoffrey Gordon all gave testimony in support of the proposed rate increase during the public hearing the DOI held on this topic.