Texas Lt. Gov. Calls for Study on Workers’ Comp Pricing

August 6, 2004

On the heels of new numbers from the Texas Department of Insurance showing that workers’ compensation insurance carriers are charging higher premiums even though claim costs are decreasing, Lt. Gov. David Dewhurst called upon a committee studying the workers’ compensation sytem in Texas to add the pricing of workers’ compensation premiums to its evaluation.

“High workers’ compensation premiums mean fewer jobs. We must ensure that the cost of workers’ compensation is fair, protects our injured workers, and helps grow our economy,” Dewhurst said in a published announcement. “The Select Committee on Workers’ Compensation is already charged to examine costs and the structure of our health care delivery system. It must also evaluate the pricing of insurance that ultimately controls what employees pay for coverage.”

“The new preliminary numbers from the Texas Department of Insurance show large increases in premiums and decreases in losses in the workers’ compensation market,” Dewhurst added. “These trends deserve a thorough examination as we consider recommendations to improve quality and effective care and make workers’ compensation affordable to our businesses.”

The added interim charge will study the pricing of workers’ compensation insurance premiums in Texas, including, but not limited to, the impact of rating tools such as schedule rating, negotiated experience modifiers, negotiated deductibles and underwriting.

Senator Todd Staples, chairman of the Select Committee on Workers’ Compensation, said, “I welcome this new charge and look forward to examining it with my colleagues. Our work thus far has shown that there are difficult issues that must be addressed in all areas of workers’ compensation, and the pricing of insurance and affordability are major issues for our employers.”

Dewhurst has made reforming workers’ compensation a priority, establishing the Select Committee on Workers’ Compensation in December. The Committee is charged with finding ways to provide quality care for injured workers at prices that don’t force businesses out of Texas.

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