Compensation Rates For Massachusetts
4% Average Rate Level Decrease
As many of you have heard, the Division
of Insurance announced a 4% average decrease
in Workers’ Compensation rates to
be effective September 1, 2003 for all policies
that are newly issues or renewed on or after
that date. The appeal period is now over,
so the new rates are official. For any policy
that has an effective date or Anniversary
Rating Date prior to 9/1/03, the new rates
will not apply until its next renewal or
next Anniversary Rating Date.
The overall average decrease is 4%, but
the actual change varies by industry and
by class. The average rate change for the
Construction Industry is a 7.1% reduction.
We have attached a listing of the new rates
for the most common construction classifications.
The average manual rate reduction for the
classes on the list is –9.03%.
With the rate change will also come a change
in your Experience Modification (and ARAP
surcharge). When your manual rates change
the Bureau also changes the amount of losses
you are expected to have during your three-year
experience period, which is used in the
Experience Rating formula. Therefore, even
if your losses and payroll in that three-year
period remained the same, if your manual
rates went down, then fewer losses are expected
and your Experience Modification (and ARAP
surcharge) will increase.
Revised Experience Modifications and ARAP
factors effective 9/1/03 and later will
be issued in due course using the new Expected
Loss Rates. You may have already received
Preliminary Modifications, which are subject
In addition to the above, the Expense Constant
used in the premium calculation will increase
from $244 to $264.
Please let us know
of any questions or if you need to know
a rate that has not been included on our