Newspaper article THE JOURNAL RECORD

Insurance Fund to Join Workers Compensation Hearings

Newspaper article THE JOURNAL RECORD

Insurance Fund to Join Workers Compensation Hearings

Article excerpt

By Nancy Raiden Titus Journal Record Staff Reporter The Oklahoma State Insurance Fund will participate in a June hearing for a 47.3 percent increase in workers compensation rates filed by the National Council on Compensation Insurance, a state board voted Thursday.

The National Council, a ratemaking organization representing private carriers, had asked the Oklahoma Board for Property and Casualty Rates not to allow the fund to participate in the rate hearing because it is the private insurer's direct competition.

The state fund writes about 40 percent of the workers compensation insurance in the state and sets its own rates.

"For several years, the state fund has actively participated in the (rate) hearings and its information has been valuable," said Steve Solomon, attorney for the National Council. "But last year that changed.

Within 48 hours after the board set its rates, the fund opted to set its own. For the first time the fund was in a competitive position regarding rates with private carriers."

Last year the fund adopted a premium increase that was 9 percent below the 22.8 percent increase allowed by the board. The fund also raised its relativity schedules to make them equal with those used by private carriers to rank risk by industry type, according to Michael Clingman, commissioner.

A gap in pricing between the state fund and private insurers began in 1986 when the Oklahoma Supreme Court overruled a 25.6 percent premium increase for private insurers, Clingman said. The high court action did not affect the fund's rate, which had gone up at the same time as rates charged by private carriers.

Private companies received another rate increase a few years later.

That action brought the rates charged by the fund and privates back to about the same level. Then private carriers adjusted their relativity schedules, an action which raised rates for some classes and lowered it for others. The fund did not adopt those changes.

The 1991 changes brought the fund and private carriers back to the same relativity schedules but at different rates. …

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