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Senators Call For Worker Comp Rate Cut, Cite Report On Reform Successes

Citing new statistics showing the positive impact of recent reforms, several state legislators are calling on the State Board for Property and Casualty Rates to cut workers compensation insurance rates again this year.

"The numbers we've seen indicate the reforms of recent years are working and workers compensation costs are coming down," said Senator Jim Maddox, chairman of the Senate Small Business Committee. "We want the board to pass the savings on to Oklahoma business owners and the quicker, the better."

Senator Maddox was joined by Senators Trish Weedn, Lewis Long, Penny Williams, Bruce Price, Brad Henry, Dick Wilkerson, Frank Shurden., Robert Kerr, Gilmer Capps, Larry ? Dickerson, J. Barry Harrison, Sam Helton and Angela Monson.

The legislators cited a new Senate analysis on the effectiveness of the 30 workers compensation reforms approved by the Legislature in the last four years.

Among the findings:

- Citing legislative reforms earlier this year, an independent actuary recommended a workers comp reduction of as high as 14%, but only a 4.5% reduction was implemented by the State Board on Property and Casualty Rates;

- Workers comp filings have decreased by 8% since a reform package was passed in a 1994 special session. That program included stiffer fraud penalties, workplace safety initiatives and dueling doctor reforms;

- Fraud charges have increased by 37% in the last year with 92% of the cases ending in guilty pleas;

- The use of the Independent Medical Examiner has increased by 42% from 1994;

- More than 40,000 workers are currently enrolled in workplace medical plans designed to contain premium costs.

Even though decisions by the Board for Property and Casualty Rates are not binding on the State Insurance Fund, the insurer for a large number of small businesses in Oklahoma, there is no denying the trend for rate decreases in Oklahoma.

"I think we've got a pretty strong arsenal of evidence to argue for another cut in workers comp rates. Based on the numbers, it's pretty clear that businesses are being charged too much and deserve some relief," said Senator Maddox.

The Lawton legislator said one of the most compelling reasons for another reduction is the testimony of an independent actuary delivered in January. Senator Maddox said the fact that only a fraction of his recommendation was implemented is significant. Additionally, the actuary testified in his report that more reductions would be warranted as reforms took effect in the months to come.

"Things have only gotten better since that testimony was delivered so I think the logical conclusion is rates should come down even more. It takes awhile for reforms to have an impact on the marketplace, but we're starting to see signs that they are having a positive influence," said Senator Maddox.

"We are definitely on the right track, but we must not let up. Between 1990 and 1992, workers compensation premiums increased by 62 percent in the private sector. Even with the enactment of the reforms of the last several years, we have a long way to go before rates are where we want them to be."

Some of the reforms enacted in recent years include 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.


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