NEWS RELEASE

WORKERS' COMPENSATION COSTS IN NEW YORK REMAIN ABOVE MOST STATES',
STUDY SHOWS

ALBANY—New York's workers' comp cost gap compared to other states has been shrinking a bit, but costs remain well above the national average, two new statistical reports indicate.

Newly compiled data from the National Council on Compensation Insurance (NCCI) show that the average cost of a workers' comp case in New York was $11,793 in policy year 1999-the most recent year for which data were available. That was 72 percent above the national average.

Still, this represented an improvement in New York's competitive position compared to the previous year, in which New York's average cost per case was double the national average, according to the NCCI statistics. From 1995 through 1999, the average cost of a workers' compensation claim in New York State rose by 8.9 percent, but the number of claims per 100,000 workers declined by 22 percent.

Another statistical compilation, this one by Actuarial & Technical Solutions, a Long Island consulting firm, reports that average workers' comp insurance rates for manufacturers in New York as of Jan. 1 of this year were 29.3 percent higher than the national average.

That represents a major improvement in the state's competitive gap since 1996, when Governor Pataki and the Legislature adopted reforms in the system; rates in New York in the mid-90s were reported to be as much as 57 percent above the national average. Still, the gap as reported by Actuarial & Technical Solutions has crept up a bit in recent years; it was 20 percent in 1998 and 27.7 percent in 2002.

Accurate, comprehensive state-by-state comparisons on comp costs are hard to come by. But the two new sets of statistics tend to confirm anecdotal reports from New York employers who also operate in other states-and who say that New York's costs are significantly above competitors'.

The NCCI data, which were compiled by Schwartz Heslin Group, Inc. of Albany, focus on costs per claim, and relate only indirectly to rates paid by employers, since rates are also impacted by the number of workplace injuries and the number of claims that result.

The Actuarial & Technical Solutions report focuses on rates, but relates solely to manufacturers, who employ only about 9 percent of the private-sector workforce in New York State and about 11 percent nationwide.

The state Workers Compensation Board has contended that the Actuarial & Technical Solutions report is imprecise because, among other things, it is based on "manual" or published rates, which often vary from rates actually charged individual employers. The state has not, however, developed any alternative means of benchmarking New York's performance on this key indicator of the competitiveness.

In each of the last five years, the state Insurance Department has held comp premium rates flat, or cut them slightly (although assessments on the rates have increased somewhat).

Click here for a table from the Actuarial & Technical Solutions study ranking states by costs.)

-30-