Rhode Island news | projo.com | The Providence Journal

« R.I. AG, Fall River oppose extension for Weaver's Cove | Today | N. Kingstown school superintendent resigns »

June 19, 2008

Beacon Mutual to lower workers' comp policy rates

The Beacon Mutual Insurance Co. said today it will lower its workers' compensation rates by an average of 7.2 percent as of Oct. 1.

The new rate will apply to new policies or those that are renewed, the company said in a news release. The reduction will save policyholders about $10 million, according to Beacon.

“Reductions in claim frequency and the efficient management of claim costs continue to be the drivers for rate decreases,” said James V. Rosati, Beacon’s president and chief executive officer. Rosati credited the company’s loss prevention and claims management programs for helping to reduce costs.

Beacon Mutual, a mutual insurance company, is the largest writer of workers' compensation insurance and the largest writer of commercial property casualty policies in Rhode Island.

The company is the state’s dominant workers’ compensation insurance carrier, with an estimated 14,000 policyholders. The company said it is financially secure with over $450 million in assets.

In April, Beacon announced it had distributed $5.6 million in refunds to about 9,400 policyholders as part of a consent order it signed with state regulators last July.

-- Journal staff writer Timothy C. Barmann

Companies that held an insurance policy for at least six months, from Oct. 1, 2005, to Sept. 30, 2006, were eligible for the refund.

As part of the agreement, Beacon agreed to compensate policyholders who paid inflated premiums starting in January 2005, when the company was using an outdated formula for assessing losses. Beacon adopted new rate guidelines in May 2006.

An extensive state examination released in the summer revealed, among other things, widespread pricing irregularities. Beacon for years had given discounted rates to favored policyholders, plied insurance agents with unearned commissions and spent lavishly on fancy golf trips, according to the “market conduct examination.”

At the time of the refund announcement, Rosati said the company had reformed its underwriting procedures “to ensure that premiums are calculated in a transparent and equitable manner.”

Posted by Mike McKinney at 5:58 PM | Permalink

June 19, 2008

Beacon Mutual to lower workers' comp policy rates

Comments

Post a comment