Businesses throughout the First State will see their workers compensation insurance rates jump between 11.4 and 14 percent this year.
Insurance Commissioner Karen Weldin Stewart approved the increase Friday after private negotiations between the state, the ratepayer advocate and the Delaware Compensation Rating Bureau. The three parties chose pursuing closed-door talks over a public hearing on the matter last week.
DCRB originally requested a hike between 38 and nearly 42 percent in October, a figure that mystified state lawmakers who passed legislation last year aimed at curtailing ballooning premium costs.
Stewart previously approved a set of double-digit increases last year, sparking the creation of a state task force that developed the measures put in place by legislators.
Most businesses in Delaware are required to carry workers comp insurance, with many owners calling these filings unacceptable.
Lt. Gov. Matt Denn, a former insurance commissioner and chair of the Workers comp task force, says he’s glad to see rates on the lower end of the range given by three actuarial consultants.
“But I’m still disappointed that there was still a settlement with higher premiums than the ratepayer advocate’s actuary thought appropriate on the day of the hearing,” Denn added.
Ratepayer Advocate Fred Townsend’s actuary would have recommended rate hikes between 9.5 and 11 percent had the public hearing gone forward.
Denn says his workers compensation task force will continue crafting recommendations to further lower future proposals.
He notes 70 percent of premiums go toward paying medical expenses, which he thinks is the crux of the problem even after he instituted changes during his tenure as insurance commissioner.
“Added on top of that is the fact that we’ve learned through this task force that for a number of years after the changes we made in 2007, some of our largest providers were not following the rate reductions that we put in place in 2007,” said Denn.
Denn expects the task force will have some new recommendations to lawmakers sometime in May.
