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Effective July 1, 2009, the New York State Insurance Fund will reduce the minimum annual premium on disability benefits policies from $100 to $60 for all new and renewing policies.
Estimates are that approximately 20,000 NYSIF DB policyholders could see their yearly charge drop the full $40.
NYSIF Executive Director James J. Wrynn noted that twice in the past five years NYSIF has cut disability benefits rates by 20 percent, but those rate reductions have not really benefitted the small policyholders. “We decided that it was time these policyholders had the opportunity to participate in rate reductions," he said. "Admittedly, it is not a great deal of money, but in this economy I am sure any opportunity to reduce costs is welcome, and we are glad to be able to offer the savings.”
NYSIF writes a significant share of small-policy disability benefits business and it is expected by reducing the minimum annual premium, it will also reduce the “return of premium credit” NYSIF has been paying to minimum premium policyholders.
NYSIF is engaged in ongoing actuarial analysis to potentially reduce disability rates even further.
July 1 is a key renewal date for NYSIF DB policies as 42 percent of total in-force policies renew on that date.
NYSIF is a non-profit agency of the State of New York created as part of the Workers’ Compensation Law of 1914. By law, NYSIF is a competitive carrier selling workers’ compensation and disability benefits insurance to any employer doing business in New York State. Approximately 185,000 employers hold NYSIF workers’ compensation policies and 61,000 hold NYSIF disability benefits policies.