Mills Sees No Need For Workers' Compensation Rate Increase In New York

NY State - Press Release, Aug 22, 2006

Superintendent of Insurance Howard Mills disapproved a filing by the New York Compensation Insurance Rating Board (NYCIRB) for an overall workers’ compensation insurance premium rate increase of 7.5 percent.  The New York State Insurance Department determined that the increase sought was not supported by the information submitted to the Department in the NYCIRB’s filing and at a public hearing held in lower Manhattan on June 28, 2006.

“The Insurance Department is disapproving the rating board’s request because our detailed analysis of the application demonstrated that an increase is not warranted," said Superintendent Mills. "The statistical data that was submitted as part of the rating board’s application, and the testimony received at the public hearing, indicate the workers’ compensation insurance market in New York remains quite profitable.”

In an eight-page Opinion and Decision, Superintendent Mills also criticized the state’s workers’ compensation insurance carriers for their collective unwillingness to expand anti-fraud efforts despite being given new and enhanced tools to combat the problem as part of Governor Pataki’s landmark 1996 legislation aimed at curbing workers’ compensation costs in New York.

“In fact, one carrier’s report (on anti-fraud initiatives), which is typical of each of the reports reviewed, indicated that the carrier referred only 320 claims for investigation to its Special Investigation Unit (SIU) out of a total policy count of over 40,000.  Without a greater commitment on the part of workers’ compensation carriers in New York to fight fraud, this Department is hard pressed to justify any new overall average rate increases,” Superintendent Mills stated.  The aforementioned carrier made only 320 referrals to its SIU out of 31,000 claims processed.

The changes contained in the New York State Employment, Safety and Security Act, signed into law by Governor Pataki on Sept. 10, 1996, have reduced workers’ compensation costs for employers, while improving workplace safety.

The law repealed Dole v. Dow, a court-imposed standard that permitted New York employers to be sued by manufacturers of injury-causing equipment, and improved workplace safety by creating a new "safety first" mandate.  In addition, the measure made the crime of workers’ compensation fraud a felony, and created an Inspector General’s unit within the New York State Workers’ Compensation Board.