Director Steven H. Hilfinger announced today good news for Michigan’s businesses as the pure premium advisory rates for worker’s compensation insurance will drop by an average of 7.4 percent.
The decrease in the premium rate signifies a lower trend for worker’s compensation insurance rates in Michigan.
“The decline in the state’s pure premium rate for worker’s compensation is great news for Michigan employers and ultimately employees and job seekers,” Hilfinger said. “We are working very hard to create a positive environment for creating business in Michigan.”
Workers Compensation Agency Director Kevin Elsenheimer said the drop in average rates for 2011 is likely due in part to a reduced number of work-related injury claims due to well-developed safety programs and a fee schedule which controls medical costs for work-related injuries and is revised annually by the state’s Worker’s Compensation Agency, which is housed in the Michigan Department of Licensing & Regulatory Affairs (LARA). LARA is serving in the leadership role of reinventing the state’s regulatory and licensing environment that is “Customer Driven, Business Minded.”
“Our worker’s compensation program is doing an effective job of cost containment,” said Worker’s Compensation Agency Director Kevin Elsenheimer. “Reducing worker’s compensation rates helps businesses reduce their operating costs, making it easier to do business in our state and potentially lead to economic growth and creating jobs for Michigan workers.”
The state’s quasi-public Data Collection Agency Board approved the 7.4 percent reduction in the average pure premium rate on July 27, 2011 to be effective January 1, 2012. The rate is the annual yardstick against which private insurance carriers can compare their rate structure for worker’s compensation coverage for the coming year.
The pure premium rates are developed by examining historical loss data reported by insurance carriers for individual job classes and then analyzing how the data will be affected on a year-to-year basis by any law changes or court decisions.