Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, December 9, 1994 TAG: 9412100025
SECTION: BUSINESS PAGE: A-19 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
The commission approved an average premium increase of 5.3 percent for industries that have to buy their workers compensation insurance in the assigned-risk market. The rate increase is less than the 22 percent requested by the National Council on Compensation Insurance, which represents companies licensed to provide insurance in Virginia.
The assigned-risk market is an insurance industry pool where businesses are forced to buy insurance coverage after they have a history of filing claims or for some other reason present a higher risk of loss to the insurer.
The insurance council also had asked for a rate increase. The council said an increase is needed because of claims by workers whose employers bought voluntary insurance coverage.
The SCC, however, reduced that amount by 5 percent, rather than increasing it by 7 percent as the insurance council had requested.
It's not immediately clear, though, what effect the decrease in cost recovery will have on rates paid by most Virginia businesses, which buy their workers compensation insurance in the voluntary market. That's because insurance company expenses and profits, which also are factored into the rates, are not regulated by the commission.
In the past, the SCC set the rates for premiums in the voluntary insurance market as it still does in the assigned-risk market, but the General Assembly changed the law two years ago to let market competition apply to the portion of the rates affected by insurance company expenses and profits.
Workers compensation insurance provides medical care and wage-replacement benefits to injured workers. Almost all employers are required to provide the coverage.
The SCC advised businesses to contact their insurance companies to find out what effect the commission's decision will have on rates.
by CNB