Oklahoma is in a situation where the cost of workers'
compensation benefits has continuously risen while the payroll costs
for employers have held relatively steady, according to Roy Wood,
director of government, consumer and industry affairs for the
National Council on Compensation Insurance.
In a meeting of a joint committee of the Oklahoma Legislature on
workers' compensation rates this week, Wood provided the members
with a graph which shows that wages for all payrolls in the state
have increased about 36 percent from 1979 to 1986.
However, the cost of medical care in Oklahoma has increased
about 82 percent in that same time period, while hospitalization
costs have gone up approximately 88 percent.
Medical costs are one of several factors which the insurance
council considers when it files a rate request.
Wood told the committee 37 percent of the cost of workers'
compensation benefits paid goes for the employee's medical bills,
while the remaining 63 percent covers indemnity - the employee's
lost work time.
"The cost of benefits have outstripped the payroll," Wood said.
He emphasized that when the council files a rate request, it is
not to provide insurers with a way to recoup losses for past years -
though the amount of premiums paid in and losses paid out are an
important factor in determining what a rate request should be - but
a means by which insurers can provide workers' compensation coverage
at rates based on anticipated future trends.
The last rate increase granted by the Oklahoma Property and
Casualty Board was 41.9 percent in 1985, but the Oklahoma Supreme
Court ordered the rates rolled back to the previous 25.9 percent.
Still, insurers in the state are allowed consent to rate, which
essentially means employers having a difficult time obtaining
workers' compensation insurance agreed to pay an insurer a
negotiated rate for the insurance - oftentimes much higher than the
25.9 percent rate.
The insurance council has filed a 33.8 percent average increase
in workers' compensation insurance in Oklahoma, but in the
legislative meeting, council officials estimated that if consent to
rate were taken into account and if the Oklahoma Insurance Fund
offers workers' compensation at about the same rate, the rate
increase would only cost workers in the state $18 million - compared
to a $120 million cost if the rate increase were considered above
just the official 25.9 percent rate.
Asked if employers should be wary of a significant rate increase
proposal when the council evaluates Oklahoma's workers' compensation
system again in the next two years, Wood replied:
"Well, no, because the request is based on past experience and
what trends we expect in the future. If there is an indication of a
need for a rate reduction, we will ask for that." . .
Bellmon Has `Nothing Definite' on Japanese Coming to Oklahoma
Gov. Henry Bellmon said in a press conference Friday he had "nothing
definite to announce" about any Japanese companies coming to
Bellmon returned Wednesday from a reverse trade mission to Japan
in which he and individuals from the private sector visited with
representatives from various businesses.
In a teleconference news conference Monday, Bellmon stated a
major Japanese firm had stated its intentions of setting up
operations in Oklahoma and would make a formal announcement in the
near future. When questioned about his statements Friday, Bellmon
"I have nothing definite to announce. There were several
Japanese companies interested in Oklahoma but the problem is that
they will have to make arrangements to set up operations in the area
of the state where they want to locate, and all these things take
In addition, he said he expects any wrongdoers to be prosecuted
for activities at Southeastern Oklahoma State University that
Bellmon labeled as being ``clearly outside legal bounds. …