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Job Injury Stats Bolster Case for Comp Rate Cut, Senators Say

New workplace safety statistics bolster the case for another reduction in workers compensation rates, according to several state lawmakers who are pushing for a fifth consecutive reduction in those business insurance premiums.

A report released by the Oklahoma Department of Labor Wednesday showed that the number of work-related deaths dropped in almost every major industry category in 1998, falling by 28 percent overall. The total was the lowest reported since statistics were first compiled in 1992.

"The positive job safety numbers are just one more piece of evidence in favor of a significant workers comp rate cut. If accidents and deaths are down, the comp insurance costs of businesses should decline accordingly. All the trends point to another rate reduction," said Senator Brad Henry, chairman of the Senate Judiciary Committee.

Henry, who authored legislation this year that bailed out the Special Indemnity Fund, paid off delinquent claims of injured workers and reduced fee assessments on insurance companies, joined two other State Senators who have called for a comp rate reduction. Last month, Senator Bruce Price and Senator Penny Williams urged the State Board for Property and Casualty Rates to cut rates again this year, citing a series of improvements in the comp market environment.

The lawmakers' request is in contrast to the wishes of the insurance industry, however. The National Council on Compensation Insurance has requested a rate hike on business, even though it acknowledged a rate cut was warranted just ten months ago.

Given the latest job injury statistics and other trends, the NCCI request is unrealistic, according to Senator Henry.

"I don't see how the insurance industry can maintain its position that comp rates should go up when on-the-job safety and other indicators have improved. Hopefully, NCCI will take a close look at the new numbers, retract its original request and support another reduction in comp rates," said the Shawnee legislator.

Henry noted that just two months ago, NCCI projected that his Special Indemnity Fund legislation would reduce comp costs. Not included in the NCCI projection was another cost-saving facet of SB 680: a 20 percent reduction in the assessments insurance companies are required to pay into the indemnity fund. Other statistics ---declining case filings, smaller awards on permanent partial disability cases and speedier processing of comp cases-- have also reflected an improving comp market.

Actuaries have attributed the improvements to a series of workers compensation reform packages approved by the Legislature in the 1990's. Those efforts have been credited with driving down costs through the increased use of independent medical examiners, restrictions on attorney fees, tougher fraud enforcement, job safety programs and the introduction of medical cost containment and managed care.

"The reforms we've approved are having a positive impact, both for businesses and workers. That's why comp rates have been cut four years in a row and should be cut again this year," said Senator Henry.

The State Board of Property and Casualty Rates, which regulates approximately one-third of the comp market in Oklahoma, is in the process of conducting its annual rate review process. A decision could come as early as September.

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Senate Communications Division - (405) 521-5605