Workers' Compensation Rate Regulation: How Price Controls Increase Costs
- Topics:
- Workers Compensation
- Tags:
- Benefits,
- University Of Pennsylvania,
- Regulation,
- Premium,
- Insurance,
- Human Resources,
- Corporate Insurance,
- Compensation,
- Business Operations,
- Worker
- Source:
- University of Pennsylvania
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Overview: In the 1980s, regulation constrained workers' compensation insurance premiums in the face of rapid growth in loss costs. The authors' develop and test the hypothesis that rate suppression exacerbates loss growth, leading to higher losses and premiums. The empirical analysis using rating class data for eight states for the period 1985 - 91 confirms that rate suppression, measured by lagged residual-market share of payroll, increased loss growth. The cost-increasing effects are greater in the residual market than in the voluntary market, but premiums increased more rapidly in the voluntary market.
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Format: PDF | Size: 159KB | Date: Apr 2001 | Pages: 36
