Reprinted from the Journal Record CompSource lowers workers’ comp rates 5% by Janice Francis-Smith The Journal Record 10/26/2005 CompSource Oklahoma, the state-created workers’ compensation insurer, will lower its rates by an average of 5 percent in 2006, due in part to reforms passed by the Legislature in 2005. CompSources’ Board of Managers voted Tuesday to lower rates by an average of 5 percent, based on classification. Depending on the claims history for each classification, individual policy owners could see a decrease of up to 10 percent, while rates for policy owners in higher-risk classifications would remain constant. “The 5 percent rate decrease is reflective of both the workers’ compensation reform enacted earlier in the year, as well as the improving loss experience of CompSource’s 31,000 policyholders,” said Jim Stergiou, an actuary with SGRisk Actuaries and Consultants, serving as a consultant to CompSource. The workers’ compensation reforms passed during the 2005 legislative session - which included provisions to limit the growth of medical costs and limit the types of claims eligible for benefits - are projected to bring costs down 4 percent for CompSource, said Stergiou. Though CompSource was created to provide coverage for high-risk employers that the private market would not insure, the private market has continued to turn away employers with a relatively low risk level, said Stergiou, which CompSource has taken on and thereby improved level of risk for the state fund’s book of business as a whole. The managers decided it would be better to use the savings to lower rates rather than through providing dividends for policyholders. “Rate stabilization has always been most important for us,” said Mike Seney, senior vice president of operations for The State Chamber, speaking both for chamber members and the chamber itself, which is insured by CompSource. The National Council on Compensation Insurance has advocated lowering rates by 10 percent, noted Seney. But Stergiou said NCCI’s recommendations were not based on claims history, and did not reflect the market conditions in Oklahoma. The board could lower rates further next year if the claims history justified the change, said board members. “The fundamental goal of CompSource is to maintain stable workers’ compensation rates while at the same time providing financial solidity for CompSource’s policyholders,” said Terry McCullar, CompSource Oklahoma president. Janice Francis-Smith reports on governmental and other regulatory issues. You may reach her by phone at 524-7777 or by e-mail, janice.francis-smith@journalrecord.com.