New York State
Insurance Department

ISSUED 7/11/2007


New York Businesses Expected to Save More than $1 Billion

       Governor Eliot Spitzer, Lieutenant Governor David Paterson, Assembly Speaker Sheldon Silver, Senate Majority Leader Joe Bruno, Assembly Minority Leader James Tedisco and Senate Minority Leader Malcolm Smith today announced that rates for workers’ compensation insurance will decline by more than 20.5% and save New York businesses about $1 billion in the 2007-2008 fiscal year. The rate drop stems from the historic reform of the Workers’ Compensation Law earlier this year.

       Based on a careful analysis of the impact of the reforms and market trends, New York State Insurance Superintendent Eric Dinallo has ordered a 20.5% decline in workers’ compensation insurance rates for the fiscal year beginning July 15. In March, when the Governor and legislative leaders announced the historic agreement designed to lower the cost of workers’ compensation insurance while increasing the weekly benefits for workers, the Governor projected the result would be a rate decline of 10% to 15%.

       “We promised that we would reduce the cost of workers’ compensation as part of our effort to make New York more business friendly,” said Governor Spitzer. “I’m proud to say that the reforms we instituted have already produced the biggest single year decline in workers’ compensation rates since at least 1975, the first year for which data is currently available. That amounts to even more cost savings for employers than we expected, while increasing the weekly benefits for injured workers. I thank Superintendent Dinallo, the Legislature, the business community and the unions for their continued cooperation that has led to this result.”

       Lieutenant Governor David Paterson said: “Today's announcement is another monumental step towards increasing the vitality of New York's business environment, while ensuring workers the benefits they have earned. The Governor continues to build a strong coalition of business, governmental, and labor leaders around solving the issue of workers’ compensation. I commend Superintendent Dinallo on spearheading this effort, along with the legislature, labor and business leaders.”

       Assembly Speaker Sheldon Silver said: “These rates make real the reforms that the Governor and the Legislature negotiated together. This historic announcement is a win for our working men and women, who are the backbone of this state and our greatest asset. It is certainly a win for our all-important business community. I commend our Labor Committee Chair Susan John for her tireless efforts to bring about this necessary and long-awaited reform. Overall, we have taken a significant step forward in our mutual commitment to rebuild and re-energize the economy of Upstate New York.”

       Senate Majority Leader Joseph Bruno said: “This legislation represents a tremendous victory for workers who will receive increased benefits, and for businesses that will see a significant reduction in premiums. The Senate has worked to reform workers’ compensation for more than a decade and I am pleased to see many of the reforms we initiated included in this legislation. I congratulate Senator Maziarz for his hard work, the representatives of business and labor for their support, and my partners in government for delivering a result that will strengthen New York’s business climate and protect employees.”

       Senate Minority Leader Malcolm Smith said: “This is quite extraordinary. The results speak for themselves. The cost savings for New York businesses is remarkable -- about $1 billion -- and when you couple that with the stronger protections for workers who are injured on the job, this is a win-win for all New Yorkers.”

       Assembly Minority Leader James Tedisco said: “High workers' compensation rates have long been a major impediment to creating jobs in Upstate New York. The reforms we passed earlier this year have helped us begin to turn the corner and more needs to be done.”

       President and CEO of the Business Council Kenneth Adams said: “This is welcome news and the business community remains grateful to Governor Spitzer and the legislative leaders for their continuing efforts to drive down the costs of workers’ compensation. This process was well begun earlier this year with the reform deal, and this news and continuing efforts to achieve administrative reforms show that we are on a good track.”

       Superintendent of Insurance Eric Dinallo said: “Workers’ compensation reform is working. The Insurance Department was assigned to implement the reforms, and we are succeeding. Last month, we produced an accelerated system for resolving disputed cases by the June 1st deadline. Today, we are announcing substantially lower rates. In the months ahead, we will continue working with the business community, labor and the insurance companies to make New York’s workers compensation system the best in the nation, improving equity while lowering employer costs. We believe that the rate reduction is fair, that the private carriers will remain profitable, and that the market will continue to be competitive.”

       The lower rate is possible largely because of the passage of the 2007 Workers’ Compensation Reform Act, which included a number of reforms designed to substantially decrease costs, increase workers’ weekly benefits and improve system performance. The reform package: