Discounted Workers' Compensation Rates The Insurance Department regulates the rates charged for workers' compensation insurance sold in New York State. In order to allow insurers to obtain a portion of the market, and thereby promote competition, the Department allows some insurers to charge lower, discounted rates for workers' compensation insurance. We examined the Department's oversight of these discounted rates and found that improvements were needed. For example, even though insurers with discounted rates are required to submit financial data justifying the continuation of their lower rates, we found that such data was usually not submitted. As a result, the continued need for these lower rates often was unable to be assessed by the Department. At the time of our audit, discounted rates were charged by 138 of the 300 insurers selling workers' compensation insurance in New York, and the rates of several of these companies had been discounted for at least 15 years. We also determined that insurers often disregarded Department recommendations to reduce or eliminate discounted rates. We recommended that the Department exercise its authority to enforce compliance with the requirements relating to discounted rates for workers' compensation insurance.
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