With many companies struggling to stay in the black these days, there is some good news coming out of Massachusetts.
Massachusetts businesses will save $75 million in a deal reached recently with the State Rating Bureau and the Workers Compensation Rating and Inspection Bureau (WCRIB) that prevents a proposed plan to increase workers compensation insurance rates by an average of 7.7 percent across the state, Attorney General Martha Coakley announced.
Following opposition from Coakley against the increase initially proposed by the insurance industry, the Commissioner of Insurance approved the settlement that eliminates the industry’s proposed plan for increases, saving Massachusetts employers, including small businesses, a total of $75 million.
In January, the AG’s Office argued before the Commissioner of Insurance that the rate request was unjustified because it was based almost primarily on an increased profit load.
Attorney General Felt Proposed Rate Hike Was Unjustified
“As the Commonwealth continues to address high unemployment, this is not the time to unfairly increase these costs for the private sector, especially for the small business community,” Coakley said. “We believe the proposed rate hike was completely unjustified and are pleased to see that rates will now be applied more fairly.”
Rates for workers comp insurance are set at least every other year in an administrative rate hearing before the Commissioner of Insurance. Massachusetts businesses are required to purchase workers comp insurance to provide coverage for expenses and lost wages of workers injured on the job.
Through the industry trade group, WCRIB, insurance companies including giants Liberty Insurance, AIG, Traveler’s Insurance Co., and other insurers planned the proposed rate hike and sought approval from the Commissioner of Insurance.
In 2012, the AG’s Office successfully blocked a previous unjustified attempt by insurers to hike rates for Massachusetts businesses by an extra $175 million.
In order to stop the rate hike, the AG’s Office litigated the matter through an administrative rate trial, which ended with a decision that rejected the proposed rate hike in its entirety.
Author Kori Shafer-Stack, Editor, Amaxx Risk Solutions, Inc. is an expert in post-injury response procedures and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. www.reduceyourworkerscomp.com. Contact: email@example.com.
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