Contrary to common belief, the Workers’ Compensation Board has nothing to do with determining premium rates. Premiums are actually set by the New York Compensation Insurance Rating Board (“CIRB”), subject to approval by the State Department of Insurance.
Premiums are based on classifications assigned to each type of business. Each company within a specific classification is assigned the same basic premium rate. These rates apply to each $100 of reportable gross payroll. To calculate the premium rate for each classification, the actual loss experience of all businesses within that classification is compared with the total reportable payroll for those businesses. In addition, each company’s experience rating has a significant impact on its premium rate.