The Massachusetts insurance department will hear testimony virtually on February 3 regarding a proposed 4.0% decrease in average workers’ compensation rates.
The rate filing submitted by the Workers’ Compensation Rating and Inspection Bureau of Massachusetts in December calls for a July 1, 2023 effective date and no change to expense constants.
While typically a rate filing made in 2022 would use policy year 2020 data, WCRIBMA used 2018 and 2019 policy year data, explaining that 2020 data was too affected by the COVID-19 pandemic to be used. The 2018 and 2019 data is more indicative of the current employment and economic environment and is consistent with the prospective nature of ratemaking, according to the bureau’s actuary.
“While the WCRIBMA understands the effects of COVID-19 will continue to be felt in the coming years, the current lower unemployment rates, the renewed availability of medical and other services, vaccines, therapeutics and the waning availability of federal payroll relief, all point to more stable conditions than those experienced in 2020,” the filing states.
The industry bureau said it expects conditions to continue to stabilize at a higher unemployment level going forward and that these trends convinced it to give greater weight to data less distorted by COVID-19 anomalies when predicting the post July 2023 environment. In this filing it gives 75% weight to policy year 2018 and 25% weight to policy year 2019.
Last year the state’s insurance commissioner approved an overall average decrease of 3.46% in workers’ compensation rates starting July 1, 2022. That cut was negotiated after the WCRIBMA sought a 2.78% average increase.
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