Larger Cut For Workers Comp Senators File Support Brief

OKLAHOMA CITY - Citing the impact of recent reforms and other market factors, a state legislator is preparing to file a "friend of the court" brief with the State Board on Property and Casualty Rates, urging it to implement a workers compensation insurance rate cut.

"All of the evidence indicates that workers comp rates should be reduced, not just by a little, but by a lot," said Senator Jim Maddox, chairman of the Senate Small Business Committee. "The market conditions are right for what could be the biggest rate cut in recent history.

"I think the reduction could be anywhere from 10 to 20 percent."

Senator Maddox is basing his projections on new workers compensation market statistics, a rate cut request by insurance companies and recent actions of the State Board for Property and Casualty Rates. The Lawton Democrat is leading a group of lawmakers which is filing the "amicus" brief with the board in preparation for its next meeting. The board is supposed to deliberate the proposed rate cut at a hearing later this month.

"Even the people who write workers compensation insurance policies have conceded that rates are too high and need to come down. The question now is how large the rate cut should be," said Senator Maddox.

The National Council on Compensation Insurance recently requested a cut of 3.4 percent, but NCCI requests have traditionally been far lower than the recommendations of independent actuaries. For example, last year NCCI requested a 1.5 percent rate increase while an independent actuary recommended a rate cut of as high as 14 percent.

"History tells us that NCCI is always going to come in with an unusually low number. That's just the way they play the game. I just want the board to know all the facts, and the facts support a substantial reduction in comp rates," noted Senator Maddox.

This isn't the first time the Senate has filed an "amicus" brief with the State Board for Property and Casualty Rates. Last year, a similar Senate document helped spur a 4.5 percent reduction in comp rates.

"Last year was the beginning of a trend that should continue for years to come. The burden of workers comp insurance costs should be reduced year, after year, after year," said Senator Maddox.

The "amicus" brief will cite a number of favorable market conditions, including the results of recent reforms approved by the Legislature.

-Workers comp filings have decreased by 8% since a reform package was passed in a 1994 special session. That program included stiffer fraud penalties, workplace safety initiatives and dueling doctor reforms;

-Fraud charges have increased by 37% in the last year with 92% of the cases ending in guilty pleas;

-The use of the Independent Medical Examiner has increased by 42% from 1994;

-More than 40,000 workers are currently enrolled in workplace medical plans designed to contain premium costs. They include the increased use of independent medical examiners, restrictions on attorney fees, tougher fraud enforcement, job safety programs and the introduction of medical cost containment and managed care.

Some of the reforms enacted in recent years include the increased use of independent medical examiners, restrictions on attorney fees, tougher fraud enforcement, job safety programs and the introduction of medical cost containment and managed care.

Senator Maddox first requested a rate cut in November, citing the improved market conditions. Since then, Insurance Commissioner John Crawford and House Speaker Loyd Benson have joined the call for lower rates.

The Lawton Democrat wants all elected officials to get involved in the effort.

"The more voices we have calling for a substantial rate cut, the more likely it will be implemented. I hope that every elected official will use his or her bully pulpit to demand a rate reduction," said Senator Maddox.

"It's the best thing we can do for business in Oklahoma."

 

 

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