July 16, 2002
Average workers' comp rates to remain unchanged
Average workers' compensation rates in New York will remain unchanged in the year starting October 1, the state Insurance Department announced.
"The decision to keep workers' compensation rates stable again this year provides for the continued restoration of the workers' compensation system -- which means even more jobs for New Yorkers and ensures New York's strong economic vitality," Insurance Superintendent Gregory V. Serio said.
Assessments for the second injury fund and other special funds will be reduced from 14.4 percent to 13.2 percent of premium. The Business Council has sought reduction of such assessments, which rose noticeably in recent years.
Serio said the department is allowing insurers to bill employers an additional 3 percent to pay for building "catastrophe loads" into their reserves, to better manage potential disasters and ensure continued stability in the workers' compensation system. The provision is designed to allow insurers to provide extra reserves for larger concentrations of workers in single locations. Changes in factors such as loss trends will offset the additional 3 percent cost, according to Monte Almer, president of the New York Compensation Insurance Rating Board.
The rating board asked the Insurance Department in June to approve average rate increases of 9.4 percent. Almer told Business Insurance he has "a little concern about adequacy" of insurers' reserves given rising costs and the lack of a rate increase.
Serio said this year's rate decision by the department marks the eighth consecutive year overall average workers' comp rates were reduced or remained stable. Average rates have declined more than 30 percent since 1985, according to department figures.