Work comp base rate to go up by 8 percent

Advertiser Staff

The state has approved a revised request by the insurance industry to raise the single-biggest segment of workers' compensation rates by 8 percent.

The National Council on Compensation Insurance, which represents the industry in tracking and setting rates, had asked the state's insurance commissioner to raise the so-called "loss-cost" portion of workers' comp rates by an average of 16 percent.

Insurance executives have said growing losses related to rising medical costs and increased workers' comp claims have made current rates inadequate.

But Wayne Metcalf, Hawai'i insurance commissioner, rejected the original requested increase, saying it did not adequately reflect signs of improvements in the state's workers' compensation insurance market.

The council resubmitted its request, asking for an 8 percent increase.

"The amended filing takes our original concerns into account, and I believe it is fair for Hawaii's business owners as well as the insurance industry," Metcalf said yesterday.

The approved increase covers only the claims portion of the rates.

The state last approved increasing the "loss-cost" portion of workers' compensation rates in February when the industry was allowed a 4.6 percent increase, or about half the amount the industry had requested and said was needed to cover its costs.

In January, insurers raised rates 3.5 percent, citing increased disability costs for Hawai'i workers.

The "loss-cost" portion of workers' comp rates is directly related to covering the cost of claims and does not include the expenses, taxes or profits of insurers.

It represents about 60 percent of the premium employers pay insurers, and is used as the basis for all workers' comp insurance rates in Hawai'i.