The Oklahoma Insurance Department announced that the State Board for Property and Casualty Rates has voted to hold the line on a key component of workers’ compensation rates, at least for the next year.
Insurance Commissioner Carroll Fisher praised the decision, saying the board hoped keeping rates at current levels would be helpful to the state’s employers.
“With the prediction of unemployment rates going up, we hope keeping workers’ compensation rates at the level they are will be good for the economy,” Fisher said.
The 4-1 decision came after nearly 10 hours of hearings during which representatives of the National Council on Compensation Insurance told board members a 6.4 percent increase was necessary while officials representing Atty. Gen. Drew Edmondson recommended a 3.1 percent decrease.
The NCCI represents the private insurance industry. Testimony at the hearing indicated the private industry writes 46 percent of workers’ compensation insurance in Oklahoma. The remainder is written by CompSource, formerly the State Insurance Fund, or is self-insured.
Witnesses for the National Council said CompSource’s market share has increased dramatically during the past two years and predicted it will grow further unless rate relief was given to the private industry.
Lynn Rogers, assistant attorney general, rejected predictions of doom and gloom.
“The lights are not going out on the insurance industry,” he said.
The board’s actuary, Dr. Mark Crawshaw said rate changes from an increase of 6.5 percent to a decrease of 6.5 percent could be justified but recommended the board leave rates at current levels.
The board’s action leaves in place current loss costs rates, on which premiums are ultimately based.
Loss costs are set on an industry-wide basis while administrative expenses are set on a company-by-company basis. Loss costs and administrative expenses are combined to set manual rates on which each employers’ premiums are based.
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