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MA Insurance Regulators Deny Request for Increase in WC Rates

September 4, 2012 by

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.

Filed Under: Business Insurance, Construction Insurance Tagged With: , , , ,

WC Rates to Increase Significantly

March 9, 2012 by

Many expect Workers Compensation rates to increase significantly this year. The MA Workers Comp Rating and Inspection Bureau has recently applied for an average rate increase of 19.3% (click here to read the full article from the Boston Globe). According to the Insurance Journal, commissioner Joseph Murphy will be holding a public meeting on this request.

Whatever rate increase is approved by the insurance commissioner will be effective September 1st, with the negotiations for the final rates continuing through most of the summer. We believe the final rate increase this year will be in excess of 10%. The rate for residential carpentry is currently 8.68. If the commissioner approves the increase of 19.3% the new rate would be $10.30. This is significant. If you have a payroll of $100,000 this will increase your cost by more than $1,500.  

You might wonder, “Is it possible to avoid these rate increases?” The answer is “yes.” There are some insurance programs that are available today that will guarantee your maximum rate for three years. This program is not available to all employers in MA. It is available to the best contractors that have had good experience. So long as your losses are under control and you have premium of over $5000, you may qualify. Please call us to see if this three year program to keep your Workers Comp costs under control is right for you. By making the switch today, you can avoid the increased rates, at least for the next few years. You do not need to wait until your policy comes up for renewal, you can start saving now.  

Remember, Workers Comp costs are controllable, and every dollar you save in Workers Comp premium goes straight to your bottom line as profit. Call us today to see if you qualify for this program and start saving on Workers Compensation premiums.

Filed Under: Construction Insurance Tagged With: , , , ,