The pandemic has by all measures changed our economy, businesses, and communities. As our recovery begins in 2021, a new future is starting to take shape. This is true, of course, for our industry and the Rating Board too. We know that while some changes may be transient, others are here to stay, and we embrace tomorrow by listening intently, scrutinizing data, and monitoring the latest economic indicators. At the same time, we continue to provide our stakeholders with the services, research, and tools that they have come to rely on.
Amid this change, we are determined to live our vision – to serve as the objective thought-leader in the marketplace – knowing that it takes focus and discipline in ordinary times and even more so today. We live in a time when people hold onto their views stridently and changing positions or making mistakes can be interpreted as weakness or a threat to competence. Yet, we know that if we do not listen intently and are not willing to question our long-held beliefs and methods, we will fall short. So, we reward innovation and the behaviors that promote it. We listen to ideas that make us think. We think about reasons why we might be wrong, instead of focusing on showing that we are right. And we seek feedback from people who challenge our thought process, not just those who agree with our conclusions.
We recognize that while our experience rating program redesign will bring value to our stakeholders, change can be difficult, especially when it impacts pricing for all employers. To facilitate a smooth transition, we are committed to providing educational materials in multiple mediums, i.e., an informative pamphlet, an animated learning video, an interactive rating worksheet, a learning session at our 2021 Forum, and stakeholder-focused webinars.
To keep our stakeholders ahead of the curve, a Mod Estimator application will be released in the spring of 2022 to provide insight into upcoming experience modification factors.
With this mindset, we have been redesigning our core programs and actuarial methodologies over the past several years and have made significant progress in 2021. In June of 2021, the New York State Department of Financial Services approved the Rating Board’s new experience rating plan, which culminated in a multi-year effort to evaluate a program that goes to the core of our mandate: promote accurate pricing while incentivizing safety. We investigated several methodologies, worked with our Actuarial Committee, and consulted with system stakeholders to develop a new program that achieves the appropriate balance between accuracy, stability, and equity while also incentivizing workplace safety.
We have also continued to modernize the Rating Board’s plans and manuals. In 2021, the New York State Department of Financial Services approved enhancements to the Rating Board’s Retrospective Rating Plan Manual and Statistical Plan. The 2021 edition of these plans are up to date, easier to understand, and more consistent with other jurisdictions, while preserving rules unique and important to the New York marketplace.
In addition, we continued our work bringing transparency to the State’s workers’ compensation system. The 2021 State of the System Report provides marketplace insights and trends while our 2021 Pandemic Impact Study drills down into some of the most important issues in our industry. We are proud of our expanding body of research and studies, which provide a deeper understanding of important issues facing our industry in New York.
While publishing research studies and educational material for stakeholders is a priority, our ratemaking methodology and annual loss cost filing remains a primary focus. In February of 2020, prior to the pandemic, our Actuarial Committee, together with our regulators, approved the Rating Board’s transition to a more stable ratemaking methodology. We continued to apply this methodology in the spring of 2021 and will remain faithful to it for the foreseeable future. I am happy to report that the New York State Department of Financial Services approved the Rating Board’s actuarially recommended loss cost level change for the 6th consecutive year. The overall loss cost level in New York State will decrease by 6.4% on October 1, 2021.
As we find a new normal in 2021, our team is working with regulators and rating bureaus nationwide to prepare for upcoming change. In recognition of the lifting of pandemic related restrictions in New York State, we suspended the use of class code 8873, which was established in 2020 in response to the stay-at-home order. At the same time, we are working across jurisdictions to monitor and examine how changes in how and where we work impact our classification system.
Throughout the past 18 months, we prioritized the safety and health of our workforce while continuing to deliver and enhance our services, tools, and products. As we look to tomorrow, we aim to rebuild our collaborative in-person work environment, in a safe and flexible way, to ensure that we remain positioned to innovate and meet new challenges. As always, I am filled with a sense of gratitude and pride about the Rating Board, and I am thankful for the support and involvement of our membership. I wish you all much continued success and I look forward to continuing our work together.