Citing the report of an independent actuary, three state senators are pressing their call for another reduction in workers compensation rates.
Senators Brad Henry, Bruce Price and Penny Williams are directing their request to the State Board for Property and Casualty Rates, which is scheduled to meet September 28th to consider a rate action.
If state regulators follow the advice of the actuarial study, it will result in the fifth reduction in workers comp rates in as many years.
"All of the evidence indicates that workers comp rates should be reduced again. We just want the board to examine our actuarial report, consider all the facts and give businesses the break they deserve," said Senator Henry.
The actuarial report was commissioned by the Oklahoma Senate and performed by Allan Schwartz of AIS Risk Consultants of New Jersey. Citing improved market conditions, the report calls for a 2.7 percent reduction.
The recommendation goes against the wishes of the insurance industry. The National Council on Compensation Insurance has requested a 5.6 percent rate hike. An actuary for the State Board for Property and Casualty Rates has sided with NCCI, recommending a rate hike of 4 percent.
"We were a little surprised to see the board's actuary recommend a rate hike, given the evidence in favor of a reduction. I guess that after four consecutive years of rate cuts, political pressure is building to give the insurance industry what it wants. We're urging state regulators to resist that pressure and do the right thing for Oklahoma businesses," said Senator Price.
In addition to the latest actuarial study, the lawmakers pointed to a series of statistics supporting a rate reduction. Some of the positive trends include:
"All of the indicators point to another reduction in comp rates. I certainly don't see how we could justify a rate increase at this time," said Senator Williams.
The Legislature approved five major workers comp reform packages in the past seven years, driving down costs through 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.
The latest reform measure, SB 680, was approved in May of this year. The legislation paid off delinquent claims of injured workers, provided an insurance rebate to many business owners and reduced fee assessments on insurance companies.
At the time, NCCI predicted SB 680 would cause additional savings in the comp market.
"A few months ago the insurance industry was predicting a reduction in costs, but today it wants a rate hike. I think logic and the evidence dictate that another rate reduction is merited," said Senator Henry, author of SB 680.