Comp rates set to drop in ’04

AUGUSTA – Maine businesses may see their workers’ compensation rates go down next year, the Baldacci administration said Wednesday.

A national rate-setting organization has filed documents showing fewer claims for on-the-job injuries in Maine and less-costly claims overall.

The “loss-cost reduction” of 3.3 percent requested by National Council Compensation Insurance is a major factor used by carriers in setting their rates, and it could translate into lower rates for 2004, state Insurance Superintendent Alessandro Iuppa said.

“This is a very positive sign, especially in light of what we’ve seen in other parts of the country,” Iuppa said. “I suspect some people will see their rates go down.”

The Insurance Bureau will review NCCI’s loss-cost filing before the carriers set rates. About 100 carriers are licensed to write workers’ compensation policies in Maine, and Maine Employers Mutual Insurance Co. has well over half of the state’s market, Iuppa said.

Gov. John Baldacci, who is on a trade mission to Ireland and Northern Ireland, issued a statement calling the NCCI filing good news for Maine employers.

The filing “is another positive milestone in our efforts to control costs and preserve jobs,” the statement said.

Of the 20 states reviewed by the NCCI for the 2003-04 filing cycle, 13 have proposed workers’ comp increases, two will not have filings, and five, including Maine, have proposed rate decreases, Iuppa said.

Maine workers’ comp rates ranked 23rd lowest in 2002 among the 51 states and the District of Columbia, according to a study by the Oregon Department of Consumer and Business Services.

The trend toward lower rates represents a dramatic improvement from the 1980s to early ’90s, when businesses pleaded for help from the Legislature, saying they could no longer afford premiums, and workers’ comp carriers fled the state.

After the workers’ comp crisis came to a head in 1991 with a state government shutdown, the system was overhauled. One of the reforms was creation of Maine Employers Mutual.