Second Straight Rate Reduction for Insurers Providing Workers’ Comp Coverage Signals DLT’s Commitment to Making It Easier to Do Business with Business
July 23, 2015
Today the Department of Labor and Training announced that it has cut the administrative assessment rate charged to insurance companies providing workers’ compensation coverage in Rhode Island. For fiscal year 2016, DLT has reduced the rate to 6.50 percent from 6.65 percent of insurance companies’ total net workers’ comp premiums.
This is the second straight year that DLT’s Workers’ Compensation division has been able to pass along savings to insurers because of the improving economy and its efficient administration of the state system that protects injured workers. Based on the net premiums collected in FY 2015, a rate drop of 15/100 of a percentage point will save insurers about $463,000 from July 1, 2015, to June 30, 2016, according to DLT actuarial data.
“Making it easier for business to do business is one of the top priorities of the Raimondo Administration and DLT is committed to running the most effective programs that we can to do our part,” said DLT Director Scott Jensen. “We’re glad to be able to pass along these savings to the insurers who provide this very important coverage.”
Workers’ comp is a form of no-fault insurance designed to help employees injured at work pay for medical expenses and make up lost wages. Premiums are based on payroll. As the Rhode Island economy has improved, more workers are on company payrolls. Correspondingly, the premium base has grown.
State law gives the DLT Director the power and discretion to set workers’ compensation assessment rates annually according to the fiscal year calendar. Jensen made the decision to reduce the rate after the Workers’ Compensation division examined its end-of-year financial records and projected how much money it would need to cover its costs over the next fiscal year.
By law, DLT finances the entire workers’ comp system using the net premiums collected by carriers. Among its functions, the Workers’ Compensation division:
ABOUT DLT: The RI Department of Labor and Training offers employment services, educational services and economic opportunities to both individuals and employers. DLT protects Rhode Island’s workforce by enforcing labor laws, prevailing wage rates and workplace health and safety standards. The department also provides temporary income support to unemployed and temporarily disabled workers. For more information, please call the RI Department of Labor and Training at (401) 462-8000 or visit the web site at www.dlt.ri.gov.