By Thomas Messier, CIC
On Thursday, September 30th, insurance regulators in the state of MA struck down a request for a nearly 19% increase in Workers’ Compensation rates. The decision means that rates will remain unchanged on September 1st. This means the average rate in MA for workers comp has not changed since 2001.
Following a five-month long hearing process, involving state insurance regulators, the Workers Compensation Rating and Inspection Bureau (WCRIB), and various other interested parties, Commissioner Joseph Murphy stated that the 18.8 percent rate increase could not be justified.
While on the surface this looks to be a good thing, at least from an insured’s perspective, the long run implications might not be so beneficial. Claims costs will continue to rise. Without an increase in rate, many insurers will be tempted to leave the Workers Comp game altogether, others will reduce their rate discounts. With limited markets, it will be more difficult for insureds to secure standard coverage. When an exposure is greater than most insurance carriers want to accept, a company in a high-risk industry may be placed in the MA Assigned Risk Pool. The pool was designed to be a policy of last resorts for difficult/high risk employers. The lack of a rate increase may force many employers back to the Pool.
Please know that we here at Mason & Mason are vigilant when it comes to regulatory procedures, and we always have the best interests of your company in mind. We continue to be diligent in providing you with cost effective solutions for your workers compensation, and are working with several underwriters that are still willing to write coverage in the standard market.
Give us a call if you want to discuss your workers compensation situation.