 Insurance Bulletin #01
June 2007
Worker's Compensation Surcharge Cut in Half
The Building Trades Employers Association (BTEA) and AGC of Massachusetts have announced that the All Risk Adjustment Program (ARAP) surcharge has been reduced from a maximum of 149% of Standard Premium to 125% of Standard Premium. The reduction is effective September 1, 2007, according to the Workers’ Compensation Rating and Inspection Bureau (WCRIB). Tom Gunning, Executive Director of the BTEA, says, “The ARAP is an unfair measure of the safety of any insured. Our research shows that an employer can be running a very safe and profitable insurance program, yet still be paying the ARAP penalty because of only one loss.” He went on to explain, “The ARAP is a holdover from the crisis days of the late 1980s and early 1990s. The Experience Rating Modification should be the sole determining factor for debiting or crediting your premium. The ERM is the only factor used in most states.”
David Powell, speaking for the AGC, said the association, through their insurance consultant, Dan Cook, President of American Risk Management, Inc., provided the research and testimony in the contractors’ efforts to eliminate or reduce the ARAP.
Mr. Cook stated, “This is welcome news. We are still after complete elimination of the ARAP, but this reduction means big savings to individual policyholders. We want to thank the Insurance Commissioner, the State Rating Bureau and the WC RIB for their cooperation and patience with our mission.”
This change in the ARAP is part of the recent hearings in which the WCRIB agreed to an overall rate decrease of 16.9%, also effective September 1.
AGC of Massachusetts extends its appreciation to Dan Cook and American Risk Management (ARM) for his involvement and expertise in this matter. For many years, AGC, BTEA, CIM and ARM have had the opportunity to meet with Paul Meagher and his staff at the (WCRIB) to openly discuss and present construction industry efforts and concerns when it comes to workers’ compensation.
AGC and ARM have also attended every hearing over the previous years held by the Commissioner’s office for the Massachusetts Division of Insurance in order for our association’s position to be heard. It has been a direct result of Mr. Cook’s research, efforts and presentations before both the WCRIB and the Division that has resulted in this reduction.
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For more information, contact Contact Dave Powell at (781) 235-2680, ext. 16.
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