New Jersey’s workers’ compensation insurance premiums will drop by roughly 1 percent in 2009, saving the state’s employers an estimated $33 million.
“There are a number of factors that affect workers compensation premium costs,” Department of Banking and Insurance Commissioner Steven M. Goldman said. “A major one is workplace safety. New Jersey employers have responded to incentives that have rewarded a conscientious workplace safety culture. The resultant reduction in losses has helped lower insurance rates.”
Goldman also announced that the maximum workers compensation benefit for injured workers will increase to $773 a week next year, a 4 percent increase over this year. This automatic benefit increase is tied to the state average weekly wage for New Jersey employees.
“In addition to this rate decrease which will benefit New Jersey
employers and support our economic growth objectives, Governor Corzine recently signed enforcement and insurance reforms that will further strengthen the State’s workers compensation program for both business and workers,” said Commissioner David J. Socolow of the New Jersey Department of Labor and Workforce Development, which administers workers compensation claims.
The private sector workers compensation system recorded about $1.9 billion in premiums from employers during 2007, the latest calendar year available. Carriers paid about 115,000 claims last year to New Jersey employees who were injured or disabled on the job. In 2007, the average medical cost per case was about $17,000 and the average cost for lost wages and other indemnity was about $20,000. Workers compensation insurance is mandatory in New Jersey through self-funding or by carrier coverage.
Rates are set by DOBI based on a filing by the Compensation Rating and Inspection Bureau (CRIB), a workers’ compensation rate service organization.
CRIB collects and reviews statistical information from insurers and uses the data to develop an annual rate filing subject to approval by the Department of Banking and Insurance Commissioner. CRIB also performs a number of other functions important to the workers compensation system.
In each filing, CRIB includes an underwriting profit factor of 2.5 percent. In recent years, competitive pressures in the New Jersey marketplace have prevented workers compensation insurers from achieving this level of profit.
Source: New Jersey Department of Banking and Insurance
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