Thirteen years ago, the largest workers' compensation market in the country–California–set aside its historical rate regulation system for one that favored open competition. That move coincided with the beginning of a nationwide soft market cycle, and the decade of industry turmoil that followed is now legendary.
New York–the second-largest market in the country–enacted legislation in March that will similarly change the direction of the state's workers' comp rate regulation. The timing of the change, in the midst of another soft point in the cycle, raises the potential for a repeat of the California experience.
The similarities between the current environment and the one that existed when California changed its rate administration system are indeed striking.
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