View from the Senate
LITTLE ROCK – Thanks to fewer work-related injuries being reported over the past two years, the cost to business of workers’ compensation insurance in Arkansas is set to go down by about 15 percent, beginning in July.
The drop in premiums was announced after the state Insurance Department adopted recommendations by the National Council on Compensation Insurance. The council recommended reductions of 14.9 percent for the state’s assigned risk pool and 15.4 percent for the voluntary market.
Companies may see their rates differ from the industry averages, after the individual risk factors for each business are calculated.
In announcing the rate reduction, the governor pointed out that Arkansas already had the lowest rates in the country for workers’ compensation insurance. Reducing premiums will further cut the costs of doing business in the state, therefore Arkansas will be even more attractive to executives looking to locate or expand here.
Even better news than the financial savings is the fact that workplaces in Arkansas are safer than ever. Last year the fewest number of accidents were reported than during the previous 20 years. The number of fatal accidents has declined dramatically.
In 2017 there were 49 fatal accidents at Arkansas workplaces, compared to 106 fatalities reported in 1995.
This marks the eighth consecutive year that workers’ comp rates have gone down. In announcing last year’s rate decrease, the state Insurance Commissioner attributed the steady downward trend to Act 796 of 1993.
The legislature established in detail what qualifies as a compensable injury.
The 1993 act takes into account that some injuries are worsened by activities done outside the workplace, and it lists activities that preclude resulting injuries from being compensable. For example, it excludes compensation for workplace injuries resulting from horseplay and fighting.
Even before passage of Act 796, injuries caused by drunkenness or drug abuse were generally not compensable. However, the 1993 law reversed the presumptions that guided the legal process.
Before Act 796 it was presumed that workplace injuries did not result from intoxication. Since Act 796 took effect, the presence of drugs or alcohol in an injured worker creates the presumption that the accident was caused by the use of drugs or alcohol.
Every employee gives implied consent to drug testing, and refusing a drug test after an accident creates the presumption that drug use caused the accident.
Act 796 greatly expanded the legal definitions of injury, which had been simply a few lines in the law books and which now includes injuries caused by rapid, repetitive motion. The major changes due to Act 796 are listed in an article in Issue 2, Volume 20 of the Law Review of the University of Arkansas at Little Rock.
Automobile Insurance Rates
In January, the Insurance Commissioner credited his department’s crackdown on fraud as a reason that Arkansas consumers enjoy some of the country’s lowest car insurance rates. Arkansas is sixteenth from the bottom in the cost of motor vehicle insurance.
The average driver in Arkansas paid $736 in 2015, compared to a national average of $889. Premiums for car insurance in Arkansas were lower than in every neighboring state.