WCA Hails DFS Decision on WC Insurance Premiums
The New York Workers’ Compensation Alliance, a coalition of injured workers and those committed to protecting the rights of injured workers, hailed a decision by the New York State Department of Financial Services to reject a request for an 11.5 percent increase in workers’ compensation premiums.
NYWCA called for full transparency of insurance carrier costs, claiming that the unverified numbers submitted by insurers are unnecessarily driving up costs for New York State businesses.
The 11.5 increase requested by insurers followed premium increases of nearly 23 percent between 2009 and 2011, and would have imposed an estimated $500 million in additional premium costs on employers in New York State. The 2009 – 2011 increases, which WCA feels were unjustified, nearly eclipsed premium reductions of 25 percent that were achieved through workers’ compensation reforms enacted in 2007.
For the past two years, NYWCA has testified before DFS against rate increases, and this year it was joined by a host of businesses testifying against the increase request, which was based on unverified cost increases submitted by the very insurance carriers that stand to benefit from the overall rate increases.
Rate increase requests are submitted by the New York Compensation Insurance Rating Board, a statutory rate service organization that until 2007 was comprised solely of private insurers. The cost increases reported by insurance carriers as the basis for rate increases are not independently verified. Nor are the numbers broken down to reveal insurance company profits, expenses and costs.
“The NYWCA represents injured workers and we strongly object to unnecessary premium increases whose only beneficiary is private insurance companies,” said Robert Grey, chair of NYWCA. “The costs for the increases fall unfairly on businesses and the blame falls unfairly on injured workers.”
Grey said that the DFS decision and the vocal opposition by employers to the unnecessary increases is a tremendous victory for injured workers. “When rates go up it becomes extraordinarily difficult to advance good legislation that benefits workers’ health. It is critical for businesses to know that claim costs are not the primary driver of increased workers’ compensation costs – insurer profits are.”
Grey said that stronger supervision and regulation of insurers is needed. Ironically, the only part of the 2007 workers’ compensation reforms yet to be implemented is a provision intended to replace NYCIRB with a transparent, accountable entity to set workers’ compensation insurance rates.
“When a group of unregulated insurers is permitted to propose rates and the state remains unwilling or unable to call for data and accountability, employers and injured workers suffer,” Grey said.