WCA Opposes CIRB Application for Increase in Workers' Comp Insurance Rates
The New York Compensation Insurance Rating Board (“CIRB”) has filed a rate application seeking an increase in workers’ compensation insurance rates of over 10%. As required by law, the Insurance Department has scheduled a public hearing, and the WCA has submitted this testimony in opposition to the rate filing.
The WCA believes that CIRB’s data collection process lacks transparency, consisting of the un-audited self-report of information by private insurers to an entity controlled by those same insurers. The information used by the CIRB cannot be verified by comparison to other sources, does not correlate with actual workers’ compensation benefit payments, and is not based on actual payments, but rather on carrier “projections” that are of dubious validity. As a result, the CIRB’s submissions are wholly lacking in credibility.
The WCA’s testimony takes the position that these factors should lead the Insurance Department to reject CIRB’s application. The WCA also calls the Insurance Department’s attention to the provisions of the 2007 Workers’ Compensation Reform Act that were intended to remove the CIRB from data collection and rate-making functions. These provisions remain unfulfilled.
The WCA also disagrees that employer or carrier costs have increased at the rate suggested by the CIRB. Available information regarding the impact of the 2007 statutory reforms does not support the CIRB’s current application.
To the extent any increases have occurred, such would be due to the failure to fully implement the 2007 statutory reforms. The lack of implementation is, in turn, directly attributable to the obstruction of various reform Task Forces by The Business Council of New York State (“the Business Council”) and the insurance industry – which collectively dominate the CIRB. The relationship between the Business Council and the insurance industry is well illustrated by the Business Council’s vote in favor of the rate increase, which (if approved by the Insurance Department) would increase costs for every non-insurance-industry member of the Business Council.
For all of these reasons, the WCA has taken the position that the CIRB’s rate application should be rejected.