Mass. Attorney General Opposes 4% Comp Insurance Rate Hike

NU Online News Service, March 2, 3:38 p.m. EST

Massachusetts Attorney General Martha Coakley's Office announced she will oppose an insurance industry request to raise workers' compensation premium rates by over 4 percent.

According to a statement from the Attorney General's Office, if Insurance Commissioner Joseph G. Murphy approves the rate increase it will cost small businesses and other employers more than $40 million in extra premiums.

The insurance companies, through their trade group, the Workers' Compensation Rating and Inspection Bureau (WCRIB), must seek approval from the commissioner to raise rates.

Ms. Coakley's office said the attorney general has the statutory right to oppose such increases and intervene in an administrative rate hearing process to ensure a rigorous review of the rates.

"Businesses, particularly small businesses, are already struggling in these difficult economic times and cannot afford to overpay for insurance coverage," said Ms. Coakley.

"As businesses are mandated to buy workers' comp insurance, they deserve fair rates," Ms. Coakley added.

"Our office will intervene in the rate proceeding to protect public interest and work to block these unnecessary increases," she promised.

Attorney General Coakley's office opposed workers' comp rate hike requests in 2007 and 2008. In February 2008, WCRIB submitted a filing to the Division of Insurance seeking a 2.3 percent rate increase.

The Attorney General's Office intervened in the action then, noting that average rates were too high and commenced litigation on behalf of Massachusetts insurance customers. The insurers at that point agreed to settle the matter by reducing rates by 1 percent. This resolution saved Massachusetts businesses $30 million, according to Ms. Coakley's office.

Her announcement noted that in 2007, her office litigated another workers' compensation industry rate request, and successfully obtained a 16.9 percent rate rollback for Massachusetts businesses. As a result, Massachusetts's businesses saved $169 million in workers' comp insurance premiums, said Ms. Coakley.