Massachusetts: Attorney general nixes insurers' request for increase
The Workers' Compensation Rating Inspection Bureau of Massachusetts -- a private, nonprofit association of insurers that files rates on behalf of its members -- sought an average rate increase of 4.5 percent. However, Attorney General Martha Coakley intervened, saying that the increase would have cost employers more than $40 million in extra premium payments. Coakley's office worked with the Massachusetts Division of Insurance's State Rating Bureau to review the industry's proposed rates and determined that the proposal included inflated projections of losses and future costs, among other infirmities. In addition, she said the rates needed to be reduced below current levels so that they would not be excessive.
A settlement reached with insurers will reduce current rates by 2.4 percent. Coakley said this will provide approximately $75 million in savings compared to the rates insurers sought. In addition, workers' comp insurance companies will be required to undergo another rate review next year, so that the attorney general's office and the State Rating Bureau may seek further rate reductions if needed.
"The lower average rates will take effect starting this September," Coakley said. "By lowering the cost of workers' compensation insurance, we can continue to promote job growth in Massachusetts by attracting new businesses and allowing current businesses to grow. This settlement protects insurance customers and ensures that they do not overpay for workers' compensation insurance."
The settlement was submitted in the rate case and will still need final approval from the state's commissioner of insurance.
Read more at the WorkersComp Forum homepage.
July 8, 2010
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