A state task force is taking the first steps toward replacing the organization that has proposed double-digit workers comp rate increases in back-to-back years.
Workers Compensation Task Force members voted Friday to consult with the National Council on Compensation Insurance, and may recommend it handle all future rate filings.
The Delaware Compensation Rating Bureau currently holds the job, but has faced fierce backlash from business owners, politicians and others over large premium hike proposals in 2012 and 2013.
Insurance Commissioner Karen Weldin Stewart eventually approved increases between 11.4 and 14 percent last month and between 14.6 and 19 percent in 2013.
DCRB has also been criticized for not providing divinable data to state committees, or raw information to Public Advocate Fred Townsend in a timely manner.
Townsend’s independent actuary Allan Schwartz says he didn’t receive updated medical cost data from DCRB until just days before he was set to testify at a public hearing last month.
“I think that the well has been poisoned in our relationship with DCRB,” said Rep. Bryon Short (D-Brandywine Hundred), who sits on the task force.
“We’ve been working with them, communicating with them for a year and a half to get them to understand how serious the situation is. It’s like pulling teeth.”
Short proposed shopping around for a new rating agency, specifically NCCI, which serves 42 other states. DCRB only submits rate filings in Delaware, with a sister agency in Pennsylvania.
Although the task force nearly unanimously approved the move, some raised concerns over whether the situation would improve with a different company.
Joseph Rhodes, a Wilmington accident attorney, said South Carolina lawmakers and state officials report similar problems with NCCI, characterizing their system as adversarial.
“It’s the devil you know versus the devil you don’t. It’s not necessarily good to trade one for the other,” said Dr. Bruce Rudin, a representative for the Medical Society of Delaware, but still joined the majority in sending out an invitation to NCCI.
Task force chair Lt. Gov. Matt Denn (D) notes that one of the biggest differences between DCRB and NCCI is the lack of significant discrepancies between proposals and the end product.
“NCCI does do that dance, but the final approved changes only differ between 4, 5, or 6 percent, not 25 percent.”
Defending his company, DCRB President Timothy Wisecarver says he has provided more information to the state than other rating agencies will.
Estimates to obtain that extra data from NCCI ranges between $70,000 and $80,000.
Short says that’s something to keep in mind, but it’s not his overall concern.
“If it’s more meaningful, this is important enough for us to pay for it. If there isn’t going to be a discernable difference then we need to consider that. But again, restoring faith in this process, I think is critical.”
But shuffling between agencies isn’t up to the Workers Compensation Task Force.
Delaware state law gives insurance carriers the power to choose which company to submit their data to. The insurance commissioner then officially recognizes that company.
Insurance Department officials say they aren’t opposed to switching agencies at this time.
Wisecarver says he understands the interest in comparing and that it can only be informative to look around.
The task force is also in the midst of crafting new recommendations to the General Assembly by May that they hope will have a significant effect on lowering rates in future years.
Two meetings will be planned in April before releasing their final report later this spring.
