Department of Financial Services Approves 9.3% Premium Rate Increase
Effective 10/1/16, New York's Department of Financial Services (DFS) approved a 9.3% increase in workers' compensation premiums requested on 5/13/16 by the New York Compensation Insurance Rating Board (NYCIRB). The Business Council of New York State supported the increase, noting that the requested increase was "justified by actual system costs" and arguing that despite the stated intent of the 2007 reforms, costs have only increased.
NYCIRB attributed two-thirds of the rate hike to the 2014 closure of the Special Fund for Reopened Cases (25-a fund). As many of you are aware, the Appellate Division, First Department, ruled in April that closing the fund violated the Contract and Takings clauses of the U.S. Constitution by imposing unfunded liabilities of $1.1 billion to $1.6 billion on carriers that had not factored those losses into their rates or reserves.
We invite you to read our analysis of the Appellate Division's decision.