S. 6798(Maziarz)/A. 9817(John)
Workers' Compensation Rates
Summary: The bill establishes a new method for setting workers' compensation rates in New York, in which a rate service organization (RSO) will file "loss costs." The bill also sets forth certain governance structure requirements for the RSO licensed in New York. Specifically:
- The bill repeals Insurance Law § 107 (a)(54), which defines the terms "workers' compensation rating board" and " New York workers' compensation rating board" -- terms that will no longer exist in the Insurance Law.
- The bill adds a new Insurance Law § 2304(g) to define the term "loss costs" for workers' compensation insurance as that portion of the rate that is intended to represent the anticipated costs of claims and associated loss adjustment expenses, including one or more trend factors.
- The bill amends Insurance Law § 2305(e) to require the Superintendent to hold a public hearing if an RSO makes a loss cost filing for workers' compensation that reflects an increase of at least 7% over the filings from the prior year.
- The bill permits RSOs to file with the Department loss costs or other statistical data, including rating plans pertaining to workers' compensation insurance beyond February 1, 2008.
- A new Insurance Law § 2313(t) is added to establish certain governance and other structural requirements for a workers' compensation RSO. In particular, this section of the bill sets forth the structure of the RSO's governing body, the function of the governing body and particulars regarding the governing body's control and supervision over the RSO's finances. This section also requires a workers' compensation RSO to have an actuarial committee, an underwriting committee and a medical and claims committee, and describes the function of each committee.
- The bill amends Insurance Law § 2316(a) to allow insurers and RSOs to continue to exchange statistical information in the context of workers' compensation insurance, which is barred by current law after February 1, 2008.
- The bill amends Insurance Law § 2305(b) to provide that the loss cost multiplier ("LCM") for each insurer providing coverage for workers' compensation will be promptly displayed on the Department's website and updated in the event of any change.
- The bill amends Insurance Law § 2339(d), which sets forth certain restrictions on the rates that the State Insurance Fund ("SIF") may charge its insureds, to conform them to the new loss cost system.
Effective Date: The bill takes effect on February 1, 2008. The RSO governance provisions are deemed repealed on June 2, 2013, and the ability of a workers' compensation RSO to file loss costs terminate on that date.
Last Action: Approved and signed by the Governor on January 31, 2008 (Chapter 11 of the Laws of 2008).