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Rates Reduced a total of 26.4 percent as a result of Governor’s 1996 Reforms

New York, July 16, 1997

Governor George E. Pataki announced on July 16 that the historic workers’ compensation reforms he fought for last year have resulted in an average two-year reduction of 26.4 percent -- surpassing the 25-percent cut the Governor promised when he signed the reforms into law in September.

The two-year average reduction was realized when State Insurance Department Superintendent Neil D. Levin approved an 8.4 percent reduction.

"When I signed these reforms into law, I promised workers’ compensation rates would ultimately fall by 25 percent," Governor Pataki said. "Today’s rate reduction of 8.4 percent, combined with last year’s largest ever 18-percent decrease brings us beyond that goal".

"This is good news for employers and small businesses who have struggled in the past to keep up with ever-increasing workers’ compensation costs," the Governor said. "By reducing the cost of doing business¸ we are making New York more competitive, helping us attract new jobs and industry and keep the jobs that countless New Yorkers rely on."

"We stood up for our principles of less government and more hope and opportunity for all New Yorkers, and now we’re seeing the fruits of our work in lower taxes, lower workers’ compensation rates and a State government eager to make businesses want to move to New York," Governor Pataki said. "More important, this rate reduction is representative of the historic changes we are making throughout state government."

This 8.4 percent reduction will take effect October 1, and will be reflected in rate notices that insurers will send employers immediately. The decreases will vary by business and type of industry, but some employers will see their rates fall by as much as 31.1 percent for the coming year.

Superintendent Levin said, "I am pleased that we’ve been able to continue to reduce workers’ comp. costs for businesses. Employers have had to endure one of the nation’s most expensive and least efficient workers’ compensation systems for many years until the Governor’s reform package was enacted."

 The changes contained in the New York State Employment, Safety and Security Act, signed by the Governor on September 10, 1996 have reduced workers’ compensation costs for employers by about $1 billion, while improving workplace safety in the Empire State. The law:

  • Attacked high costs by repealing Dole v. Dow, a court-imposed standard that permitted New York employers to be sued by manufacturers of injury-causing equipment, except for only the gravest of injuries;
  • Improved workplace safety by creating a new "safety first" mandate that requires all employers with poor safety records to institute safety programs, or else face tough new sanctions;
  • Continues to fight fraud by making the crime of workers’ compensation fraud a felony, punishable by jail time, and by the creation of a Workers’ Compensation Inspector General, with broad powers to investigate fraud whenever it occurs;
  • Ensures that claims filed by injured workers are handled more quickly by reducing delays caused by needless paperwork.

Prior to last year’s enactment of the Governor’s reform legislation, New York had the second highest workers’ compensation costs in the United States -- 57 percent higher than the national average, 53 percent higher than in Massachusetts, 59 percent higher than in Connecticut and 85 percent higher than in New Jersey. Costs for New York businesses has doubled in less than a decade.

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