Massachusetts: Attorney general to challenge hike in comp premiums
The Workers' Compensation Rating and Inspection Bureau of Massachusetts -- the nonprofit licensed organization that files rates on behalf of workers' comp insurers in the state -- recently submitted the request, which would go into effect Sept. 1. Attorney General Martha Coakley is opposed to the increase, which she said would cost small businesses and other employers more than $40 million in extra premiums. Coakley said her office would fight the rate hike by intervening in the administrative rate hearing process.
"Businesses, particularly small businesses, are already struggling in these difficult economic times and cannot afford to overpay for insurance coverage," Coakley said. "We have serious concerns about the insurers' proposed rate hike and the additional strain that it would put on employers. Businesses are mandated under state law to purchase workers' compensation insurance, and they deserve fair rates to ensure that they can comply without having to layoff additional workers. Our office will intervene in the rate proceeding to protect the public interest and work to block these unnecessary increases."
Paul Meagher, president of the WCRIB, said that despite the improved safety efforts of employers and insurers that have driven down the frequency of injuries in the state, claim severity has continued to trend higher. This, he said, is due in part to ongoing increases in medical and pharmaceutical costs. Meagher noted that even if the filing is approved, rates in Massachusetts would still be more than 64 percent less than they were in 1991 when lawmakers enacted workers' comp reform measures.
It wouldn't be the first time that Coakley's office has challenged a rate increase. When the WCRIB submitted a filing in 2008 seeking a 2.3 percent rate hike, the attorney general intervened, noting that average rates were too high and commenced litigation on behalf of Massachusetts insurance customers. The insurers agreed to settle the matter by reducing rates by 1 percent. In addition, Coakley's office litigated another workers' comp increase request in 2007 and obtained a 16.9 rollback in rates.
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April 15, 2010
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