Printer Friendly

PENNSYLVANIA COMPENSATION RATING BUREAU ASKS INSURANCE DEPARTMENT FOR INCREASE IN PROVISION FOR 'LOSS COST'

 PHILADELPHIA, Aug. 31 /PRNewswire/ -- The Pennsylvania Compensation Rating Bureau today announced that it has made a filing asking the Pennsylvania Insurance Department for an overall average increase of 4.66 percent effective Dec. 1, 1993, in the provision for claim payment, or "loss cost" applicable to workers' compensation insurance in the commonwealth.
 Tim Wisecarver, president of the bureau, noted that, "This filing is required under the provisions of Act 44 of 1993, and is the first of a series of steps by which the pricing of Pennsylvania workers' compensation insurance will be changed from using full advisory rates filed by the bureau on behalf of its members, to a loss cost system. Under this loss cost system, bureau filings will be limited to the portion of rates required for the payment of indemnity and medical benefits for injured workers, and individual insurers will make independent filings for expense and profit provisions for use by each such insurer."
 Wisecarver emphasized that other changes made to the workers' compensation system in Pennsylvania by Act 44 had reduced the indicated change in loss costs sought by the bureau. "Absent changes enacted by this legislation, the bureau's analysis shows that an overall average increase of 23.43 percent in loss costs would have been necessary," Wisecarver said. "The medical cost control features of the law, together with revisions in the calculation of certain indemnity (wage replacement) benefits, resulted in the reduction of 18.77 points in the filing's overall indication.
 "Prior to the implementation of Act 44," Wisecarver stated, "continued adverse experience in Pennsylvania had rendered provisions for the payment of claims in current rates substantially inadequate."
 Among the factors noted as reflective of recent Pennsylvania experience, Wisecarver included the following:
 -- 13 percent annual increases in costs of indemnity benefits such as wage loss and permanent disability payments for injured Pennsylvania workers;
 -- Continued increases in the duration of workers' compensation claims, producing extended periods of payment of both indemnity and medical benefits;
 -- Increases in the numbers of contested and litigated workers' compensation claims, up over 150 percent from 21,000 in 1985 to 53,000 in 1992;
 -- Annual increases in costs of medical treatment of approximately 20 percent, with medical costs rising from 32 percent of total loss costs in 1980 to 41 percent by 1990; and
 -- Precedents established in case law decisions requiring continued payment of benefits during the pendency of certain types of petitions before the Workers Compensation Bureau, the administrative agency within the Department of Labor & Industry charged with deciding contested claims, and requiring additional vocational criteria and standards to be met before indemnity benefits can be terminated, modified or suspended.
 "Act 44 has changed the way in which prices will be established for medical services and has created certain procedures for determining what services will be provided. The act has also revised the method used to determine indemnity benefits for some claims. As a result of these changes, the continuing effects of some of the above factors appear to have been substantially reduced, resulting in the lower indicated change in loss costs presented in the bureau's filing today," Wisecarver summarized. "However," Wisecarver noted, "Act 44 did not address all of the factors affecting the cost of Pennsylvania's workers' compensation system. Therefore, loss costs need to increase by the requested 4.66 percent on average."
 /delval/
 -0- 8/31/93
 /CONTACT: Bruce E. Decker, director, public affairs of Pennsylvania Compensation Rating Bureau, 215-568-2371/


CO: Pennsylvania Compensation Rating Bureau; Pennsylvania Insurance
 Department ST: Pennsylvania IN: INS SU:


CD-KC -- PG003 -- 7416 08/31/93 10:17 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 31, 1993
Words:594
Previous Article:DUFF & PHELPS RATES U S WEST CAPITAL FUNDING SHELVES
Next Article:LADBROKE AT THE MEADOWS ANNOUNCES LABOR DAY WEEKEND RACES
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters