Massachusetts businesses will see an average 14.6% reduction in workers’ compensation rates—a cut that is almost twice the size of what the insurance industry’s rating bureau proposed in its filing. The lower rates go into effect on July 1, 2024.
The order signed by acting Insurance Commissioner Kevin Beagan was issued June 21, following hearings during which the insurance department’s State Rating Bureau (SRB) and the state Attorney General (AG) both questioned various aspects of the proposal from the Massachusetts Workers’ Compensation Rating and Inspection Bureau (WCRIB), which represents insurers.
The WCRIB last December initially sought an overall rate decrease of 8.3%, a recommendation that was reduced in February to a decrease of 7.6 % after a mathematical error was corrected. The AG recommended an overall decrease of 17.5% while the SRB opposed the WCRIB’s proposed rates but made no alternative overall recommendation.
The regulatory agency concluded that the WCRIB filing was inadequate in several areas, including in its treatment of loss development issues; underwriting profits; calculating certain business classifications; the omission of a rate recommendation for the F (U.S. Longshore and Harbor Workers) classes; and data selection including the exclusion of certain 2020 data.
The order rejecting WCRIB’s filing concluded overall that “the evidence does not support approval of the rate decrease requested in the filing.”
The insurance department did, however, acknowledge that insurers have done a good job on cost containment, successfully adopting and retaining virtual methods necessitated by the COVID pandemic and exercising judgment in selecting when telemedicine may not be appropriate or an onsite audit is preferable.
In addition to ordering the 14.6% reduction, the state also ordered the WCRIB to file new proposed rates in December 2024 for adoption in July 2025.
For 2024, then-Insurance Commissioner Gary Anderson ordered a statewide average cut of 10.2% starting July 1, a considerably bigger reduction than the 4% reduction proposed by WCRIB. In May, Anderson left the state agency to become the new chief executive officer of the National Association of Insurance Commissioners.
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