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For Release — Wednesday, June 30, 2004

COUNCIL TESTIFIES THAT PROPOSAL TO HIKE WORKERS' COMP RATES
HIGHLIGHTS THE PRESSING NEED FOR COST-CUTTING REFORMS

ALBANY—New York's workers' compensation costs are far above average, and the dramatic increase in premiums proposed by New York's Compensation Insurance Rating Board (CIRB) would make this competitive disadvantage even worse for New York, The Council told state regulators in testimony today.

"New York's costs of workers' compensation are high-72 percent above the national average on a costs-per-case basis," Kerry Kirwan, The Council's legislative analyst specializing in workers' compensation, said in the testimony. "There are specific reasons these costs are high, and it is time for them to be fixed."

"Until we reform the system itself by easing the fiscal burden on the employers of the state, we will find ourselves here year after year addressing the issue of the rates," she said. "We must not let this opportunity to fix the system slip through our hands."

The Council submitted its testimony at a hearing sponsored by the state Insurance Department at the Legislative Office Building in Albany. The hearing was intended to garner public reaction to CIRB's proposal to increase average premiums 29 percent, effective Oct. 1. The CIRB proposal would also increase assessments, a tax on premiums that all employers must pay, by 6 percent.

Comp costs in New York are above average because New York has failed to enact critical reforms-reforms that have been shown to cut costs in other states, Kirwan said in the testimony.

Her testimony highlighted the key reforms New York must enact to being reducing its costs:

Two key reform bills (S.5230-Libous/A.8862-Schimminger and S.6841/A.10975, which is the Governor's program bill) contain most of these reforms. Before New York makes a bad competitive burden worse, it should enact reforms like these to bring New York's comp costs closer to the national average, Kirwan said.

"The reforms we are seeking are vital to the economic growth and stability of New York businesses," the testimony concluded.

In recent weeks, The Business Council has published a new series of reports documenting the case for workers' comp reforms. Topics covered in the five reports published in the series so far include durational limits, objective medical guidelines, scheduled payments, and Social Security and pension offsets.

The Comp Watch '04 series is available from www.bcnys.org/inside/compwatch04.htm.

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