Mass. Workers’ Comp Writers Seek 2.3% Rate Boost

The Workers Compensation Rating and Inspection Bureau, which represents insurers, submitted its filing on Feb. 29. The bureau has requested a Sept. 1, 2008 effective date for new rates. A hearing was held April 3.

The rates were most recently revised last September, when a 16.9 percent rate decrease took effect.

If the WCRIB’s filing for an increase of 2.3 percent is approved, the cumulative rate decrease since 1991 — when the most recent reform legislation was enacted — would still be more than 64.8 percent, the bureau notes in its filing.

The bureau’s latest filing also requests an increase in expense constants. The proposed higher expense constants are $338 for at least $200 of standard premium (up from $318); $169 for less than $200 in standard premium (up from $159); and $68 per capita (up from $64).

In its filings for 2005 and 2007 rates, the WCRIB was required to exclude the data reported by a major carrier in Massachusetts, American International Group. Those data reporting problems have been rectified and AIG data has been included in the current filing, according to WCRIB.

According to the filing, AIG has become the largest writer of workers’ compensation insurance in the state, accounting for about 28 percent percent of the premiums.

(As part of a larger 2006 settlement, AIG paid states $343.5 million including $34 million to Massachusetts for under-reporting workers’ compensation premiums. AIG was found to have improperly booked workers compensation premiums as general liability premiums from at least 1985 through 1996, which reduced AIG’s taxes and residual market payments.)

The current industry rate filing notes that the Massachusetts residual market remains one of the largest in the country, with approximately 13.9 percent of the market, making it the second largest provider.

Topics Workers' Compensation Massachusetts AIG