Utah had the third lowest workers compensation insurance premiums in the manufacturing sector on Jan. 1, 1997, which is continuing good news to those agencies trying to attract new business to the state. A year ago, Utah had the sixth lowest premiums.
According to a report from Actuarial & Technical Solutions Inc., Ronkonkoma, N.Y., Utah trailed only Virginia and Indiana in having the lowest rates for manufacturing companies, but the state ranked ninth in providing the lowest statutory-required wage replacement benefits.The report ranked only 44 of the states because the remaining six are those providing workers compensation insurance exclusively through a state fund. In Utah, that type of insurance is available from the Workers Compensation Fund of Utah, private carriers or companies can be self-insured.
For the manufacturing industry in the country, the report noted that it cost $4.42 per $100 of payroll to purchase workers compensation insurance, which is 14 percent lower than a year ago.
Ranking behind Utah in workers insurance premium costs were Iowa, Maryland, North Carolina, South Carolina, Nebraska, Oregon, Idaho and Arizona. The five states with the highest premiums costs were Louisiana, Oklahoma, Rhode Island, Hawaii and Pennsylvania.
Larry Bunkall, president of the Utah Manufacturers Association, was pleased with the report's results, saying some changes made by the Workers Compensation Fund of Utah with safety programs and fraud detection are paying off big time.
He noted that until 1995 workers compensation premiums in Utah were averaging double-digit increases, but that year things turned around after the Legislative passed eight bills on that subject. Many groups, including the UMA, were instrumental in getting those bills passed, Bunkall said.
As a result, insurance premiums decreased 8.2 percent in 1995, declined 10.1 percent in 1996, dropped 11.9 percent in 1997 and for 1998 the state insurance commissioner has approved a 16.3 percent decrease. Bunkall said the worker's compensation insurance program in Utah is a win-win situation for all because the premiums are decreasing and the average wage benefits also are decreasing.
Lane Summerhays, fund president, said the report is evidence that the changes made by Summerhays and his staff are paying off. He said work-related accidents are down and the fund is doing a better job of controlling costs once the accident occurs. The fund writes workers compensation fund insurance for about 54 percent of Utah companies.
However, just as he has been saying for months that the fund, a quasi-public agency, needs to be allowed to make changes to better compete in the marketplace, Summerhays said the report shows that the fund should be allowed to make changes so it won't fall behind and push the rates skyward.
Workers compensation cost
States with lowest States with highest
workers compensation workers compensation
comparative costs comparative costs
State Rank State Rank
Virginia 1 Louisiana 44
Indiana 2 Oklahoma 43
UTAH 3 Rhode Island 42
Iowa 4 Hawaii 41
Maryland 5 Pennsylvania 40