Injured Workers Insurance Fund (IWIF), Maryland's state-run workers' compensation insurer, said its customers have had a drop in claims frequency and it is responding with a 5 percent overall reduction in their base.
The Towson, Md.-based independent agency, which is the state's largest comp insurer with 31 percent of the market, said the move by its board follows its annual rate analysis performed by independent consulting actuary Deloitte and Touche.
Sixteen industries, IWIF said, will receive dramatic rate cuts. The rate changes are based on IWIF's historical data and actuarial principles. They will be effective Jan.1, 2008.
IWIF said its reductions are driven largely by a continued decline in claims frequency that has dropped approximately 10 percent over the past two years.
The primary driver, IWIF said, has been its persistent focus on fostering a safety culture in the workplace. The company said it has successfully introduced safety programs and other initiatives, which policyholders have adopted, resulting in safer working conditions for employees.
"As the market leader in workers' compensation insurance in Maryland, I believe these rate changes are appropriate and will benefit our customers as well as strengthen the business economy in the state," said Tom Phelan, IWIF president and chief executive officer.
Mr. Phelan added, "Our slogan, 'Safety Saves with IWIF,' is more than just words; it has real, tangible effects."
Rial Simons, chief actuary, indicated that these pricing initiatives will allow IWIF to continue to generate reasonable revenue while at the same time keep workers' compensation insurance equitable, available and affordable to all Maryland businesses.
IWIF said its current assets and reserves total $1.5 billion.
Last month the National Council on Compensation Insurance, the state's insurance rate and data provider, filed for workers' comp rate decreases, effective Jan. 1, 2008, of 1.7 percent. This 1.7 percent pure premium loss cost reflects a change of -2 percent, according to the Maryland Insurance Authority.
IWIF does not submit their premium and loss experience data to NCCI and is not required to file its rates with the MIA. Pure premium filings submitted by NCCI on behalf of the private insurance industry do not reflect IWIF's experience, and the MIA has no authority to review the rates being charged to Maryland businesses by IWIF.
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