AG, insurers agree to cut in employers’ costs
A settlement reached with insurers yesterday would cut the workers’ compensation costs of Massachusetts businesses by about $35 million a year, Attorney General Martha Coakley said.
The settlement, which still needs the approval of Massachusetts Insurance commissioner Joseph G. Murphy, would slice workers’ compensation rates by 2.4 percent beginning in September, Coakley said. Insurers initially sought a 4.5 percent rate increase, which would have boosted business premiums by a total of about $40 million.
The industry’s initial proposal, Coakley said, inflated potential future losses and costs to insurers. She said her office might seek additional rate cuts next year.
“By lowering the cost of workers’ compensation insurance, we can continue to promote job growth in Massachusetts by attracting new businesses and allowing current businesses to grow,’’ Coakley said in a statement. “This settlement protects insurance customers and ensures that they do not overpay for workers’ compensation insurance.’’
Paul Meagher, president of the Workers’ Compensation Rating and Inspection Bureau of Massachusetts, which represents insurers, said in a statement, “In today’s uncertain economic climate, maintaining a healthy voluntary market for workers’ compensation insurance will likely be a challenge given the continuing increase in claims severity and low expected industry investment returns.’’
Workers’ compensation insurance covers lost pay and the expenses of workers hurt on the job, as well as providing compensation for permanent injuries.
Insurers filed for an increase with the state Division of Insurance, but the attorney general’s office, which represents ratepayers, intervened in March to oppose raising rates.
Coakley has intervened in workers’ compensation cases before, saving Massachusetts employers more than $200 million since 2007, according to the attorney general’s office.