Massachusetts Denies Workers’ Compensation Rate Increase

News Summary

The Massachusetts Insurance Commissioner has rejected a proposed 7.1% increase in workers’ compensation insurance rates, saving businesses around $80 million. The request by the Workers’ Compensation Rating and Inspection Bureau was deemed inadequate, with the attorney general’s office advocating for a decrease instead. This decision follows a previous reduction in rates, aiming to alleviate financial burdens amid rising operational costs. The ruling is expected to stabilize costs for companies and support economic growth in the state.

Boston, Massachusetts – The Massachusetts Insurance Commissioner, Michael Caljouw, has denied a request for a 7.1% increase in workers’ compensation insurance rates, a decision projected to save businesses across the state approximately $80 million. The request, made by the Workers’ Compensation Rating and Inspection Bureau, was aimed at addressing rising claim costs associated with inflation and various market factors.

Caljouw criticized the Bureau’s assumptions regarding loss development and trend factors, determining that their data and methodology were inadequate to substantiate the proposed rate hike. As a result, he concluded that the current workers’ compensation rates were not excessive and rejected both the suggested increase and alternative decreases.

Opposition to the proposed increase came from the attorney general’s office, which advocated for a 6.2% decrease based on more conservative assumptions and lower projected claim costs. The State Rating Bureau also recommended decreases ranging from 2.1% to 3.1% for standard classifications and 6.7% to 7.6% for federally regulated jobs.

This decision follows a 14.6% reduction in workers’ compensation rates approved in 2024, which aimed to support Massachusetts businesses by providing an estimated savings of around $87 million. Governor Maura Healey expressed support for the ruling, indicating that it would ease financial burdens on companies amid increasing operational costs.

In addition to the denial of the rate increase, the Healey administration has been proactive in implementing measures to reduce costs for businesses. These measures include proposed changes aimed at lowering energy costs and minimizing health insurance deductibles.

For the current year, the landscape of workers’ compensation insurance in Massachusetts features notable companies leading by market share. The top underwriters of workers’ compensation insurance in 2023 include A.I.M. Mutual Insurance Companies holding an 11.07% market share, closely followed by Hartford Insurance Group at 10.58%, Travelers Group at 10.47%, Liberty Mutual Insurance Companies at 7.33%, and Zurich Insurance US PC Group at 6.59%.

The denial of the rate increase is a significant move for the insurance landscape in Massachusetts, set against a backdrop of rising inflation and economic challenges. With workers’ compensation costs being a critical factor for businesses in the state, the decision is expected to help stabilize the financial environment, allowing companies to allocate resources to growth and job retention. Industry experts are closely monitoring how this ruling will impact the overall insurance market and the business climate moving forward.

Caljouw’s ruling underscores the ongoing balance insurers must strike between ensuring adequate coverage and the economic realities facing businesses today. This latest decision represents a cautious yet impactful approach to managing workers’ compensation rates while considering the broader economic implications for Massachusetts enterprises.

Deeper Dive: News & Info About This Topic

• Insurance Business: Massachusetts Insurance Commissioner Denies Rate Increase
• Wikipedia: Workers’ Compensation in the United States
• Hoodline: Massachusetts Businesses to Save $80 Million
• Google Search: Workers Compensation Massachusetts
• Workers Compensation: Off-Clock Workers Injuries
• Encyclopedia Britannica: Workers’ Compensation