A California insurance company and its subsidiary are the first carriers to propose reimbursing employers in Pennsylvania that were overcharged this year on workers’ compensation policies, the state Insurance Department said.
Los Angeles-based Zenith Insurance Co. and its subsidiary ZNAT Insurance Co. submitted information to the state on how they will retroactively correct charges to employers for workers’ comp policies written between April 1 and Dec. 31.
Ron Ruman, a spokesman for the state’s insurance department, said the two companies did not say how much money they would return to businesses.
A call seeking information from Zenith was not returned.
Zenith and ZNAT wrote just under 1 percent of workers’ comp insurance in Pennsylvania in 2017, the latest data available, Ruman said. Zenith wrote $18.9 million in workers’ comp and ZNAT wrote $7.1 million, in Pennsylvania, he said.
In November, the state revealed an error in loss-cost calculations, which make up a portion of workers’ comp premiums, which raised average overall loss costs by 8.9 percent.
The Pennsylvania Compensation Ratings Bureau, an independent bureau that helps set workers’ comp premiums in the commonwealth, notified the state after it discovered a data error made by a carrier that overstated its 2016 claims.
The error was large enough to throw the bureau’s calculations off, according to Bill Taylor, president of the PRCB, which makes filing on behalf of nearly 325 companies that write workers comp insurance in Pennsylvania.
The state approved the PCRB’s revised filing with new calculations last week.
On Wednesday, Insurance Commissioner Jessica Altman commended Zenith and ZNAT for reimbursing their business customers that were overcharged.
“I strongly encourage all workers comp insurers in Pennsylvania to follow this example,” Altman said in a statement.
“Because information in the earlier PCRB filing was used in setting rates in place since April 1, 2018, it is possible some businesses paid higher rates than they should have since that time,” Altman said.
“Therefore, I have urged all workers comp insurers to determine as quickly as possible whether this is the case for any businesses they insure, and to reimburse any businesses which have overpaid as a result of the filing that was effective April 1, 2018.”
Insurers who have submitted workers comp informational filings to address any overcharges for policies written between April 1, 2018 and December 31, 2018 can be found on the Business Insurance page at www.insurance.pa.gov.