Rate Drop in North Carolina Workers’ Compensation Insurance Policies
Thanks to the efforts of the North Carolina Rate Bureau, North Carolina workers’ compensation insurance policy rates will plunge nearly 10% for 2010. Wayne Goodman, the state’s Insurance Commissioner, announced the rate slash this week, which government statisticians believe will help NC employers save around $120 million in 2010. An Insurance Department spokeswoman argued that the rate slash would drive down the cost of doing business in the state and thus spur growth. Insiders believe that the rate slash was made possible in part by a dramatic decline in the number of North Carolina workers’ compensation claims filed. This is the second year in a row that there has been a significant decrease in NC workers’ comp insurance rates. Last year, rates were slashed 4.4% over 2008 numbers.
The rate decrease won’t help every employer. Almost all North Carolina state employers won’t be impacted. And many private employers — for instance, those employers who have to pay insurance for high risk jobs — will likely not see the benefits of these insurance rate slashes.
The rate slash does nothing to change fundamental laws and rules governing North Carolina workers’ compensation. In general, businesses that employ three or more people must pay for insurance in case an employee suffers disability, requires medical care, or requires compensation for lost wages.
Whether the motion will spur renewed business commitments in the state is an entirely different debate. The recession has hit North Carolina relatively hard, notwithstanding the state’s diverse economy and relatively resilient tech sector in the Research Triangle. Perhaps these rate decreases will incentivize businesses to take on new projects, hire new employees, and attract contracts to the state. Still, some skeptics worry that the rate slash may have a dampening effect on growth and that it will destabilize the ‘playing field’ in certain industries, artificially favoring businesses which benefit from the rate cut and hurting businesses that don’t qualify.
More Web Resources:
Workers’ comp rates falling in N.C., Charlotte Observer, Nov 5, 2009
