The Pennsylvania Insurance Commissioner and the Labor & Industry Secretary said they have implemented agreements with two insurers and a state agency to protect Pennsylvania businesses from any errors in the filing of loss costs, a factor in setting workers’ compensation insurance premiums for employers.
The agreements follow a costly error that had to be corrected at the end of 2018 by the Pennsylvania Compensation Rating Bureau, an independent bureau that helps set workers’ comp premiums in the state.
The revision filing was necessary because of an error in a filing submitted by the PCRB, which took effect April 1, 2018 and was used to determine workers’ comp rates in Pennsylvania, according to a news release.
“The error in loss cost filings involved two insurers, Highmark Casualty, which subsequently sold its workers compensation insurance business to BrickStreet, and resulted in incorrect information being used by the PCRB, resulting in some businesses paying higher rates than they should have,” state Insurance Commissioner Jessica Altman said in a statement.
The revised filing corrected the error as of Jan. 1.
“Following an investigation, the insurance department determined the incorrect reporting of loss cost data to the PCRB occurred and was approved by the PCRB because of insufficient internal controls at both the insurers and the PCRB,” Altman said. “Our department has now taken action through these consent orders with Highmark Casualty, BrickStreet, and the PCRB, to ensure that these companies have sufficient internal controls to lessen the chance of a similar error impacting Pennsylvania businesses’ insurance rates in the future.”
So far, about 90 workers compensation insurers writing about $660 million in annual premiums have reimbursed their business customers.
“While no one wants to see data errors occur, we are very pleased with the resolution of the issue and we applaud all the parties involved for putting in place a system of accountability that should prevent similar errors in the future,” said Gordon Denlinger, state director of the National Federation of Independent Businesses in Harrisburg. “The PCRB has made a good faith effort to remedy the issue at hand and they are to be applauded for working constructively with the Department of Insurance in reaching this resolution.”
The NFIB has 12,500 member businesses across the state, with an average employee count of about 10, he said.
“We did hear from a large number of member businesses who expressed gratitude that this issue was highlighted and that the overcharge issue was bought to light,” Denlinger said.