FOR IMMEDIATE RELEASE
SUPERINTENDENT SERIO REJECTS 29.3 PERCENT WORKERS' COMP INCREASE
Superintendent of Insurance Gregory V. Serio today rejected the filing submitted by the New York Compensation Insurance Rating Board (CIRB) that recommended an overall increase of 29.3 percent in workers compensation insurance rates. The Superintendent determined that the data CIRB submitted to support its request -- combined with testimony and information gathered during three public hearings -- did not warrant the increase.
In the Opinion and Decision issued by the Department today, the Superintendent questioned the need for such a large rate increase given the consistent level of profitability reported by the workers compensation industry in recent years, which reported a return of 4.1% for 2004 and 4.5% in 2003. The Department believes that the true rate of return for the industry is as high as 8.1%.
The Department also found that CIRBs filing did not address the effects of Section 32 of the Workers Compensation Law, which allows insurers to settle claims at significant savings. The Departments review of the filing also found that insurers writing workers compensation are not performing adequately in fighting fraud, and the Department cannot approve the increase when companies have yet to reap the positive benefit from New Yorks anti-fraud measures.
"With profitability levels remaining high, with the industrys repeated failure to calculate savings from compensation system efficiencies and fraud initiatives, together with other issues raised in my Opinion and Decision, the industry has not met its burden to justify this rate increase request," Superintendent Serio said. "Therefore, the filing has been disapproved and the current rate level will remain in place."