Dover – Insurance Commissioner Matt Denn announced Tuesday that he is ordering an 11.57 percent across-the-board cut in average workers compensation premium rates effective October 1, 2008, and that he will consider making additional reductions within the next 60 days. 

 

Combined with a package of 17.75 – 22 percent rate cuts Commissioner Denn ordered last fall, this reduction will mean average Delaware workers compensation rates have been cut by approximately 30 percent since last November.

 

The workers compensation rate cuts announced Tuesday are the first resulting from workers compensation cost control measures passed by the General Assembly in 2008, Commissioner Denn said.  But, in the order to insurance companies, Commissioner Denn warned that the workers compensation insurance companies have “not made sufficient efforts to determine the potential cost savings to carriers of all of the provisions of Senate Bill 1,” and told the carriers and Department of Insurance staff to provide him with information to consider additional reductions.

 

 “I intend to ensure to the maximum degree permitted by law that any likely cost savings resulting from Senate Bill 1 are reflected in lower premiums rather than being retained as windfall gains by insurance carriers,” Commissioner Denn said in his order.

 

With total workers compensation premiums paid by Delaware employers estimated at $122 million a year, the rate cuts ordered by Commissioner Denn Tuesday should mean savings of at least $14 million to Delaware businesses.

 

These actions are on an application by the Delaware Compensation Ratings Bureau, which submits requests for the “loss cost” calculations upon which all workers compensation insurance companies base their rates.

 

“I am extremely proud to have been part of a process that has resulted in such a positive outcome for injured workers and employers in the state of Delaware,” said state Rep. Bill Oberle, one of the sponsors of the workers compensation reform legislation. “We now have a law in place that can be fine tuned, as necessary, in order to assure quality care for the injured worker as well as maintain reasonable cost controls for employers who bear the costs of workers comp premiums.”

 

After Commissioner Denn took office in January 2005, he made an independent actuarial review of the application and public comment part of the annual review process for the workers comp rate basis. He reduced a proposed increase in the workers comp basis for 2006 and then froze the average basis for rates for 2007.

 

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