New York State
Insurance Department


ISSUED: 7/17/2000

FOR IMMEDIATE RELEASE

GOVERNOR PATAKI ANNOUNCES WORKERS’ COMP. RATE REDUCTION
Rates Cut Again as a Result of 1996 Reforms  

            Governor George E. Pataki today announced that workers’ compensation rates will be reduced this year by an average of 2.5 percent. The reduction, combined with rate decreases achieved in the past five years, represents an overall reduction of almost 40 percent.

            "When I signed the 1996 reforms into law, I promised workers’ compensation rates would drop -- today’s 2.5 percent reduction, combined with the past four year’s reductions, demonstrates that we have achieved that goal," Governor Pataki said. "By reducing the cost of doing business, we are making New York State even more competitive, helping us attract new jobs and industry."

            The 2.5% reduction will take effect October 1, 2000, and will be reflected in rate notices that insurers will send to employers immediately. The decreases will vary by business and type of industry, but some employers will see their rates fall by as much as 27 percent for the coming year such as those in the tunneling and iron and steel erection classes.

            New York State Department of Insurance Superintendent Neil D. Levin said, "Today’s rate reduction is a victory for all of New York State. The sweeping reforms of 1996 reduced costs on employers while simultaneously improving the delivery of services to injured workers. In prior years, the State’s system stunted the growth potential of businesses and, in the process, prevented the creation of new jobs and opportunity. I am pleased that we have been able to continually reduce rates."

            The Safety and Security Act also repealed Dole v. Dow, reducing costs for employers. The 1972 Court of Appeals decision had permitted manufacturers of equipment that caused a workplace injury to recover damages from the injured worker’s employer, costing New York employers more than $300 million every year. New York had been the only state that subjected its employers to such unlimited liability from a "third party lawsuit."

            In 1995 rates were reduced by 8.4 percent and in 1996 rates were fell by over 18 percent. In 1997 rates decreased an additional 7.5 percent and in 1998 rates were cut by 3 percent. Last year’s rate level was unchanged. Prior to the enactment of the Governor’s reform legislation, New York State had the second highest workers’ compensation costs in the United States.

Workers’ Compensation Rate Decreases

Year

% Rate Change

1995

-8.4

1996

-18.1

1997

-7.5

1998

-3.2

1999

0

2000

- 2.5

    


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