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LONG, INSURERS REACH SETTLEMENT ON WORKERS' COMPENSATION INSURANCE; RATES TO RISE AN AVERAGE OF 3.6 PERCENT

 RALEIGH, N.C., Sept. 13 /PRNewswire/ -- Insurance Commissioner Jim Long today announced a settlement with the insurance industry over the rates paid by North Carolina businesses for workers' compensation insurance.
 North Carolina insurers, represented by the N.C. Rate Bureau, had originally sought a rate hike of 9.5 percent on Sept. 1. Today, the Rate Bureau agreed to raise 1994 workers' compensation rates by only 3.6 percent, the smallest percentage increase in over eight years. In addition, insurers consented to reduce premiums currently being paid by businesses for 1993 policies by 5.2 percent.
 "We're pleased to be able to spare businesses another big hike this year, and to reduce last year's 40 percent hike," said Insurance Commissioner Jim Long, "I think the claim data from the past year make clear that the 1993 increase was excessive. While there are still problems in workers' compensation that need to be addressed, the trends are not as severe as the industry contends. The primary cost driver continues to be the high -- and still rising -- cost of medical care."
 Long pointed out that while workers' comp rates have increased during his eight-year tenure as Commissioner, the difference between what the insurance industry has sought in rate filings and what was actually collected over his objection represents substantial savings for employers, including over $64 million for 1994 rates and nearly $200 million for 1993 rates.
 In an Aug. 30, 1992, rate filing, the insurance industry sought a 58.4 percent increase in workers' compensation rates. After hearings, Long ordered an increase of 23.4 percent. The industry appealed that decision to the Court of Appeals and implemented an increase of 40.3 percent for 1993 rates.
 Under the terms of the settlement, 1994 rates for industrial classifications will average 3.6 percent over last year's rates, and will become effective Jan. 1, 1994. The settlement will reduce current premiums for 1993 in either of two ways.
 Employers who have not yet been billed for all 1993 premiums will receive an immediate reduction in rates which will lower their payments for the remainder of their policy's term. Employers who have already been billed for all 1993 premiums will receive a premium credit in their end-of-year policy audits. Both methods will achieve the same result: a 5.2 percent reduction in the 1993 costs of this coverage to North Carolina employers whose policies were priced at the full Rate Bureau rate.
 State law requires businesses with three or more employees to purchase workers' compensation coverage, which pays lost wages and medical bills for employees injured on the job. Rising rates for this type of insurance have been of great concern to businesses throughout North Carolina.
 -0- 9/13/93
 /CONTACT: Paul Mahoney of the N.C. Department of Insurance, 919-733-5238/


CO: N.C. Department of Insurance ST: North Carolina IN: INS SU:

MM -- CH002 -- 1144 09/13/93 09:08 EDT
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Publication:PR Newswire
Date:Sep 13, 1993
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