State insurance regulators have approved a double-digit reduction in workers compensation rates - an action that will save Oklahoma businesses more than $26 million according to actuarial estimates.
The State Board for Property and Casualty Rates, the panel that regulates private insurance carriers, approved a 12.7 percent rate reduction at its annual rate review Thursday. It is the sixth reduction in workers comp rates in the last seven years and the largest single-year cut during that time period.
Three State Senators - Johnnie Crutchfield, Dave Herbert and Keith Leftwich - wrote the board last week, urging it to recognize the cost savings of recent legislative reforms and enact the maximum rate reduction possible.
Senator Herbert said the latest reduction would give businesses a much-needed break on comp insurance, in addition to sending a positive signal about Oklahoma's business climate.
"We're putting money back into the pockets of business owners and telling industrial prospects outside of the state that we're a friendly home to new companies and new jobs. A rate reduction of this size will be a big boost to our economy," said Senator Herbert.
In deliberating the rate case, state regulators considered the testimony of several different actuaries who reported that costs were on the decline in Oklahoma's workers comp market. They cited several positive trends, noting that the frequency and severity of workers comp claims are at an all-time low in Oklahoma. In fact, both categories have declined steadily since 1993.
Since 1990, the Legislature has enacted several major reform packages designed to drive down workers comp costs. The reforms included 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.
In response to the improving comp market, state regulators have cut comp rates six times since 1995 - an overall reduction of more than 30 percent.