Newspaper article THE JOURNAL RECORD

Request Filed for Worker's Compensation Rate Hike

Newspaper article THE JOURNAL RECORD

Request Filed for Worker's Compensation Rate Hike

Article excerpt

A request for an average 33.8 percent increase in the workers' compensation insurance rate paid by Oklahoma employers has been filed by the National Council on Compensation Insurance with the Oklahoma Insurance Commission, it was reported Friday.

The request asks the Oklahoma Board for Property and Casualty Rates for the overall increase, along with a realignment and adjustment of the experience modification factor in determining rates.

If the request is granted, it probably will work out that certain employers will see a reduction in their premiums, Deputy Insurance Commissioner Bert Marshall said Friday.

"Workers compensation insurance in Oklahoma is classified into 600 categories, and that 33.8 percent rate increase request is an overall average," he said. "Some of those rates will be reduced, while some will be increased and some increased greatly.

"With the request to adjust the experience modification factor, which we call the `E Mod,' most employers, those whose claims experience is lower, will see a decrease.

"However, (because of certain state laws) in the real world, this increase actually is only 7.8 percent because most insurance carriers now write policies higher than the March 1985 rate manual now in use."

These state laws allow insurance companies to refuse to write a policy on a particular employer because of low premium rates. However, if the employer will sign a consent to write form, the company will write the insurance at 25 percent above the 1985 rate manual, he said.

If an employer refuses that insurance, there is the option of purchasing workers' compensation insurance through the State Insurance Fund, a state agency which writes policies at 25.9 percent higher than the rate manual.

"That gives the insurance company a safety valve," Marshall said.

The request is under study by the members of the commissioners office to prepare for certification which must be decided upon within 30 days, Marshall said.

"We don't determine the merits of the request, we merely determine if the request meets state law and is filed properly," he said.

After certification, the request will be sent to the state insurance board, which has 30 days in which to set a hearing, then another 90 days to make a determination as to the merits of the request.

A request for rate increases is not automatically approved, Marshall said.

In fact, since 1980, four such requests have been approved, with two of them later rolled back and one nullified by the Oklahoma Supreme Court. …

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