Newspaper article THE JOURNAL RECORD

Legislators Rally for Workers Compensation Rate Cut

Newspaper article THE JOURNAL RECORD

Legislators Rally for Workers Compensation Rate Cut

Article excerpt

Citing the report of an independent actuary, three state senators are pressing for another reduction in workers compensation rates.

Democratic Sens. Brad Henry, Shawnee; Bruce Price, Hinton, and Penny Williams, Tulsa, are directing their request to the State Board for Property and Casualty Rates, which is scheduled to meet Tuesday to consider a rate action.

If state regulators follow the advice of the actuarial study, they said, it will result in the fifth reduction in workers compensation rates in as many years.

"All of the evidence indicates that workers comp rates should be reduced again," Henry said Wednesday. "We just want the board to examine our actuarial report, consider all the facts and give businesses the break they deserve."

The actuarial report was commissioned by the Senate and performed by Allan Schwartz of AIS Risk Consultants of New Jersey. Citing improved market conditions, the report calls for a 2.7 percent rate reduction.

The recommendation goes against the wishes of the insurance industry, however.

Actuaries representing the insurance industry, the attorney general and the property and casualty board have recommended increases ranging from less than 1 percent to a little more than 5 percent.

The National Council on Compensation Insurance has requested a 5.6 percent rate hike and the property and the casualty board's actuary, while suggesting a 4 percent hike, said an increase of as much as 8 percent could be justified.

"We were a little surprised to see the board's actuary recommend a rate hike, given the evidence in favor of a reduction," Price said. "I guess that, after four consecutive years of rate cuts, political pressure is building to give the insurance industry what it wants. We're urging state regulators to resist that pressure and do the right thing for Oklahoma businesses."

In addition to the latest actuarial study, the lawmakers pointed to a series of statistics supporting a rate reduction. Some of the positive trends, they said, include:

* Workers compensation claims are down. Claims flied by employees have decreased by 26 percent since 1994 and are at their lowest level since 1990.

* Since 1994, claims have decreased by 50 percent in the construction industry, 54 percent in manufacturing and 42 percent in retail services. …

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