Workers’ comp costs may fall
The national bureau is requesting an 11.6% decrease in Hawaii based upon the number of claims filed in 2006
The state Department of Commerce and Consumer Affairs' Insurance Division announced yesterday that workers' compensation premiums should go down further in January 2009.
The National Council on Compensation Insurance has filed a request for a decrease of 11.6 percent in workers' compensation loss costs - the amounts paid for claims by insurers, which are a significant component of premiums.
That reduction is based on a continuing decrease in the number of claims filed in 2006 (the latest year in which complete data is available).
Over the last three years, Hawaii Insurance Commissioner J.P. Schmidt has approved decreases of 19.3 percent, 18.2 percent and 12.3 percent, respectively, in loss costs with evidence of a significant reduction in claims.
With the latest reduction, the total decrease in workers' comp loss costs amounts to 61.4 percent over the last four years.
"This is one of the largest declines in workers' compensation insurance rates of any state in the nation," said Schmidt. "These lower rates show that the great efforts of Hawaii's employers and our employees have been effective in providing a safer work place for our work force. The lower workers' compensation loss cost rates will help Hawaii employers offset some of the other rising costs they are facing."
He added that the state Department of Labor and Industrial Relations has made strides in creating safer and healthier workplaces. DLIR also has made marked improvements in streamlining the hearing process so that claims are resolved in a timely manner.
But Schmidt said more work needs to be done to reduce the adversarial nature of the system at the legislature, as well as to improve the quality of care to injured workers so that they can return to work promptly.
Once NCCI's filing is approved, insurance companies can adopt the lower loss costs in determining their premiums. Other components that make up a premium include production, general expenses, contingencies, profit, taxes, licenses and fees.