Massachusetts regulators reject significant rate hike proposal
Instead, employers would see no rate change this year.
In its filing nearly six months ago, the Workers' Compensation Rating and Inspection Bureau of Massachusetts acknowledged it was seeking a "significant" increase in average rates, but said rates have not increased in more than a decade. "Our inability to obtain any rate relief in recent years has unfortunately made a large increase necessary this year."
The WCRIB cited three main drivers of the proposed rate hike:
- The actual experience of carriers has continued to deteriorate. "Reported losses, both before and after development, are higher than they were last year," the bureau said.
- The predicted net trend in loss ratios, which takes account of changes in claim frequency and severity relative to changes in wage levels, is positive for the first time in seven years.
- Investment income was inadequate for insurers to offset underwriting losses.
The change was requested to take effect Sept. 1.
The regulators heard from the Massachusetts Association of Insurance Agents, the Building Trades Employers' Association, the Associated General Contractors of Massachusetts, the state Chamber of Commerce, the Greater Boston Chamber of Commerce, Risk Metrics Corporation, Liberty Mutual Insurance Company, Associated Industries of Massachusetts, and the Charter Group of Insurance Companies.
The state's attorney general had alternately proposed a rate decrease of 8.5 percent. Regulators said there was insufficient evidence to support either a rate increase or decrease at this time.
Read more at the WorkersComp Forum homepage.
October 8, 2012
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