Cape Gazette
http://capegazette.villagesoup.com/p/945619

Delaware increases workers’ comp rates

Weldin Stewart approves 14.6 percent hike for voluntary market
By Kara Nuzback | Jan 09, 2013
Source: File photo Insurance Commissioner Karen Weldin Stewart approved major increases for Delaware workers' compensation insurance, Jan. 4.

Delaware business owners must pay more to insure employees for on-the-job injuries. Employers are required to carry workers’ compensation insurance to safeguard workers who are killed, injured or become ill as a result of their duties.  Higher risk occupations mean higher premiums for business owners.

Delaware premiums for regular voluntary market customers will go up 14.6 percent, and rates for clients in the residual market will increase by 19 percent.

Delaware Insurance Commissioner Karen Weldin Stewart approved an increase in premiums for workers' compensation insurance Jan. 4; the new amounts are retroactive to Dec. 1, 2012.

Delaware Compensation Rating Bureau proposed the increase.  The bureau’s initial recommendation, filed in August, would have raised insurance rates by 40 percent.

“I recognize that any rate increase in the workers’ compensation system is going to be tough on businesses during this economic climate. The amended rates I approved were the best balance between the several considerations that bear on the workers’ compensation filing,” Weldin Stewart said.

Deputy Insurance Commissioner Gene Reed told the Cape Gazette in October the proposed increase was part of the bureau's annual rate filing.  He said Delaware Chancery Court imposed mandatory reductions over a four-year period from 2008 to 2011.  On Dec. 1, 2012, he said, the reductions no longer applied.

Reed said the high increase is the result of a number of costly claims involving serious injuries.  “There’s some 20 or so varied, large claims out there that are significant in terms of medical cost,” Reed said.

Delaware Department of Insurance held a public information session in each of Delaware’s three counties to inform and educate residents about the proposed change before it was approved.

A public hearing was also held Dec. 20 in Wilmington.  House Republicans rallied against the increase.  Prior to the hearing, the minority caucus sent a letter to the Department of Insurance, asking it to reject the initial request for a 40 percent insurance premium hike.

In a Dec. 7 press release, Republicans cited two independent analyses of the bureau’s 40 percent request.  The reports concluded that rates should go up, but by much less than 40 percent.

“INS Consultants determined that workers’ compensation rates in the voluntary market should increase 23.5 percent and residual market rates should go up by 28.1 percent.  These findings are 38.6 percent and 35.4 percent lower than the hikes sought by the DCRB for the voluntary and residual markets, respectively,” the release stated.

AIS Risk Consultants’ analysis said voluntary market rates should increase by only 18 percent and residual market rates should increase by 23 percent, the release stated.

After Weldin Stewart approved reduced increases, House Republicans reluctantly accepted the compromise.

"I wouldn't call this a happy ending, but rather a better outcome as compared to what might have happened," said Rep. Harvey Kenton, R-Milford.  "While this is still a significant increase, it is less than half of what was contained in the Compensation Rating Bureau's filing."

House Minority Leader Daniel Short, R-Seaford, is a small business owner and co-chairman of the bipartisan House Small Business Caucus. “Had the DCRB rating hike been approved as originally requested, it could have had a devastating impact on many businesses, especially those in construction, landscaping and other high-risk sectors," Short said.

Businesses can learn more about workers’ compensation costs by contacting the Office of Workplace Safety at the Delaware Department of Insurance at 302-674-7378.

Comments (0)
If you wish to comment, please login.