A Positive Result of Workers' Compensation Privatization
CHARLESTON, WV - Gov. Earl Ray Tomblin today announced a reduction in the regulatory surcharge on workers' compensation premiums for both private market and self-insured employers. These surcharge reductions will provide across-the-board savings to all employers totaling $2.7 million.
"This rate reduction and subsequent savings for all employers is a direct result of our choice to tackle the State's workers' compensation problem in an effort to support West Virginia businesses and establish a competitive business climate," Gov. Tomblin said.
During privatization of the workers' compensation market, a regulatory surcharge of 5.5 percent was added to all policies to support the regulatory and appellate processes of the workers' compensation system. This surcharge will drop to 5 percent effective January 1, 2013. The private market will realize an annual savings of $2.2 million. The January effective date will provide insurers the necessary time to make programming and policy issuance changes reflecting the new rate and provide the Offices of the Insurance Commissioner time to update their tax reporting forms and databases.
Self-insured employers will also see a similar percentage decrease in their regulatory surcharge. This rate reduction will generate approximately $500,000 in annual savings for the self-insured employers. The adjustment for self-insured employers is effective July 1, 2012.
Since the privatization of the workers' compensation market, private market rates have decreased a total 51.8 percent. These reductions in total annual market premiums freed up approximately $170 million dollars for West Virginia businesses.