State employers will have something to be thankful for this fall following a decision by the State Board for Property and Casualty Rates Wednesday cutting workers compensation rates 8.5 percent as of Nov. 1.
But Commissioner John Crawford warned, future rate cuts are dependent on actions by the State Legislature reducing costs in the system.
The board's unanimous decision to cut rates, or at least those portions related to losses, followed a full day of hearings and reflects the most its actuary, Dr. Mark Crawshaw from Georgia, said it could reasonably expect to cut.
The National Council on Compensation Insurance, which represented the insurance industry in the hearing, requested a 3.6 percent rate decrease. And, an actuary for the state's attorney general recommended a 10.3 percent cut, while the state Senate filed an actuarial report recommending 14.9 percent cut.
Crawshaw recommended the board use figures for the last 10 years, which generally show a downward trend. In the past, he has recommended using figures starting in 1978, but he said that the figures have become clearer with time, and those from prior to 1988 are not reflective of the current workers compensation climate in Oklahoma. Prior to 1988, rates reflected an increasing trend, he said.
Former Maine Insurance Commissioner Joseph Edwards, testifying on behalf of the National Council, recommended against changing rates at all. He painted a dire picture of the workers compensation climate in Maine when he took over the commissioner's job in the late 1980s. At that time, the National Council filed for a 295 percent rate hike.
Larry Derryberry, attorney for the National Council, quipped that Edwards' comments represented the first time a witness for the National Council had disagreed with its actuary.
The National Council's request was based on an average of figures from 1995, 1996 and 1997.
Dee Dee Mays, actuary for the council, noted the general trend over the three years was toward an increase, rather than a decrease, but said she chose to recommend the average of the three years.
"We're assuming that for stability purposes, that the rate is going to equal the average of these three years," she said.
Mays told the board her figures reflect a general decrease in that portion attributed to lost wages, but an increase in medical costs. …