Home

WORKERS' COMPENSATION PROPOSED RATE INCREASE — 2004 Priority Issue

Issue:

Less than a month after the state Insurance Department rejected a proposal to increase average workers' comp premiums by 29 percent, the department has received a new request to increase rates—this time, by 9.5 percent.

The New York State Compensation Insurance Rating Board (CIRB), an insurance-industry entity that each year proposes changes to premium rates, said in an August 6 bulletin that it has submitted the new proposal to increase rates and asked that it take effect within 75 days of approval. The bulletin is available in PDF format from www.nycirb.org. Click on "bulletins" and choose bulletin number 2065.

"The Rating Board has responded to the concerns addressed by the Department in the Opinion and Decision [rejecting the first rate-increase proposal] and has met and discussed with the Department the possibility of a revision in rates sometimes during the upcoming rate period," the CIRB bulletin said.

Even without an increase in premiums, employers' overall comp costs are likely to go up next year because the state has approved a 5.6 percent increase in the state's assessment rate. Assessments, which are a key part of the burden of workers' compensation costs in New York State, support the operational expenses of New York's Workers' Compensation Board (WCB) and various special funds supported by New York's workers' comp system.

The new increase will bring this tax from 14.3 percent to 15.1 percent. Last year, the assessment rate increased 10 percent, from 13 to 14.3 percent.

The Business Council has argued that continuing pressure for higher premiums reinforces the importance of cost-cutting workers' comp reforms.

In testimony at a state Insurance Department hearing June 30 on workers' compensation premiums in New York State, The Business Council highlighted the key reforms New York must enact to being reducing its costs.

Status:
8/12/04

Under review at the state Insurance Department.