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DELAWARE DEPARTMENT OF INSURANCE ANNOUNCES RATE ROLLBACK ORDERED ON WORKERS' COMPENSATION RATES

 DELAWARE DEPARTMENT OF INSURANCE ANNOUNCES
 RATE ROLLBACK ORDERED ON WORKERS' COMPENSATION RATES
 DOVER, Del., Sept. 29 /PRNewswire/ -- Insurance Commissioner David N. Levinson announced today that he has ordered a rollback of a May 1992 rate increase on workers' compensation premiums.
 The commissioner's order was signed on Sept. 25, 1992, and takes effect on Sept. 30. After that date, the 12.5 percent increase in premiums collected by insurers from employers may no longer be collected, and the amounts collected by insurers between May 5 and Sept. 30, 1992, based on the increased rates must be returned to employers. The Delaware Compensation Rating Bureau (DCRB) which files rates for insurers writing workers' compensation in Delaware, has the right to appeal the commissioners' order. The Delaware Compensation Rating Bureau (DCRB) which files rates for insurers writing workers' compensation in Delaware, has the right to appeal the commissioner's order.
 Levinson stated, "The DCRB filed for a rate increase in 1990 when their own date showed they were already making an excessive profit on workers' compensation insurance. The filed rate was disapproved by me but was implemented after a Superior Court decision permitted the collection of the increase. The department's consulting actuary now clearly has demonstrated that the insurers writing this line of business in Delaware earned an average return on net worth of 25.4 percent in 1990. The loss ratio was 57.1 percent. By any standard the increased rates are excessive."
 Levinson stated that in addition to an overall 12.5 percent increase in premium collected, the rate increase included a 25 percent surcharge on employers who are under the assigned risk program. "The 25 percent surcharge on assigned risk insureds is especially repugnant. The DCRB has been prohibited in the past from using this totally arbitrary surcharge because there is absolutely no basis in loss experience for this penalty," Levinson further stated.
 The commissioner stated that the DCRB would probably request a hearing on the disapproval order. "Because a rate filing generally tries to predict future losses, the 1990 filing increase can be reviewed based on actual experience. The department's actuary has indicated that the inappropriateness of the loss trends submitted in that filing become obvious when viewed in light of actual losses."
 -0- 9/29/92
 /CONTACT: David N. Levinson, Delaware Insurance commissioner, 302-739-4251/ CO: Delaware Department of Insurance ST: Delaware IN: INS SU:


MJ-MP -- PH027 -- 4434 09/29/92 13:59 EDT
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Publication:PR Newswire
Date:Sep 29, 1992
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