New York rating board 'extremely disappointed' in loss cost decision
At the same time, the administration approved a 1.2 percent decrease to the New York State Assessment, from 20.2 percent to 18.8 percent. The net effect will be a reduction in rates for employers as of October.
"We are extremely disappointed in the decision to disapprove the filing," said Ziv Kimmel, vice president and chief actuary of the rating board. "It is clear from reading the decision that it was based on economic factors and gave very little consideration to the actuarial analysis performed by the rating board."
In its proposal in May, the rating board said the change was needed because of continuing adverse experience of New York workers' comp carriers and attributable to the following factors:
- While the 2007 reform has been fully implemented with respect to the increase in maximum weekly benefits, sections of the reform which were expected to result in significant savings have been implemented at a slower pace.
- Claim frequency is no longer exhibiting a significant downward trend which in the past served as an offset to increasing claim costs.
- Continued rise in both indemnity and medical claim costs.
- Increasing Loss Adjustment Expense primarily due to additional resources necessary for compliance with recent legislative and regulatory changes.
In rejecting the rating board's proposal, Gov. Andrew Cuomo criticized the state's workers' comp system as being "too costly for businesses and ineffective for injured workers. ... With the new measures implemented by the state and our continued work together with the business and labor communities, we will remain on track to create a system that works better for both employers and employees."
The Department of Financial Services, which issued the decision, said a variety of developments are altering the workers' comp landscape, including the completion of the workers' comp reforms. It noted that the governor last year directed the Workers' Compensation Board to deliver on the components of the reforms and implement any outstanding provisions and said even though the savings from the reforms were immediately realized by businesses, the implementation of the measures supporting those savings proceeded at a slower pace.
Read more at the WorkersComp Forum homepage.
August 27, 2012
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