View this article online: https://www.claimsjournal.com/news/east/2003/07/18/30746.htm
New York State’s workers compensation market could face a meltdown similar to the current crises in California, Florida, Texas and other states, according to the New York Insurance Association (NYIA).
The rejection of an 11 percent increase in workers’ compensation rates by the New York Insurance Department reportedly fails to recognize soaring medical costs, the threat of a terrorist attack and other expenses required to provide benefits to injured workers.
“Businesses and their workers need a stable, predictable and competitive workers compensation market,” said Bernard Bourdeau, president of NYIA. “Ignoring insurers’ needs for adequate rates in the face of visibly higher costs paves the way for a potential crisis in the marketplace.”
Bourdeau pointed out that medical costs are growing by eight to nine percent per year and wage replacement costs for injured workers are growing seven percent annually. He also noted that the savings from workers’ compensation reforms enacted in 1996 were fully reflected in the rate filing.
Bourdeau observed that “in a rate suppressed environment, insurers will be reluctant to write more coverage, driving up insurance costs in the long run and stifling the anticipated economic recovery of New York.”
In addition, the loss of a robust workers’ compensation marketplace in New York could reportedly result in unmanageable growth in the State Workers Compensation Insurance Fund.