Employers to see insurance decrease Worker injuries down, and so are costs

AUGUSTA – State insurance regulators have approved a filing by the National Council on Compensation Insurance that will result in most employers in Maine seeing a decrease in their workers’ compensation insurance rates in 2009, with business groups saying that is good news as employers deal with the recession.

“Our finding was that the frequency of claims is down and when there are fewer accidents the costs go down,” said Laura Backus-Hall, the regional representative for NCCI. “I think it is clear that there has been a good job in prevention of workplace injuries in Maine.”

The filing approved by the State Insurance Superintendent will reduce rates overall by 7.6 percent with the dollar value to employers, based on the premiums paid in 2007, totaling about $18.3 million. The NCCI filing covers most insurers.

Backus-Hall said while the frequency of claims is the major factor in the filing, other factors like a slower increase in the cost of medical care provided under workers’ comp insurance also contributed to the decrease in rates.

She said Maine is following a national trend of fewer workplace injuries and she singled out the Maine Employers Mutual Insurance Co., usually called MEMIC, as doing an exceptional job of providing workplace safety programs.

The company announced in October it was returning $15 million in dividends to its policyholders. The company has about two-thirds of the workers’ compensation insurance market in the state.

MEMIC President and CEO John Leonard said more than 20,000 Maine employers who were policyholders of the company during 2005 will get payments. That will bring the total dividends paid to policyholders to more than $100 million since 1998.

David Clough, state director of the National Federation of Independent Businesses said the two actions together are certainly good news for many employers at a time of increased operating costs.

“It means they have more money with which to pay bills and salaries and keep people employed,” he said. “That is good news.”

Clough said the rate decrease will have a significant impact on the employers across the state that have been hit by double-digit increases in electricity costs and significant growth in health insurance premiums.

“It particularly benefits industries that pay a lot because of the nature of their jobs, and that does not vary by size, it varies by the type of business,” he said.