Rate Framework (Archived): Background

In September 2010, the WSIB appointed Professor Harry Arthurs to review a number of issues related to the financial situation of the WSIB. Professor Arthurs was assisted by four distinguished advisors from various backgrounds – Maureen Farrow, Buzz Hargrove, John O'Grady and John Tory – and by a small staff seconded from the WSIB. In addition, research support for the review was provided by the Conference Board of Canada and Morneau Shepell, a firm of consulting actuaries.

Arthurs' Report, Funding Fairness, made specific recommendations regarding reforms to the WSIB's premium Rate Framework. This led the WSIB to initiate a comprehensive review of its current classification structure, premium rate setting process and experience rating programs.

This review included a multi-phased Rate Framework Reform Consultation led by Special Advisor, Mr. Douglas Stanley.

Following the consultation, Mr. Douglas Stanley released his final report, Pricing Fairness: A Deliverable Framework for Fairly Allocating WSIB Insurance Costs (PDF). In this report he recommends that the WSIB develop an Integrated Rate Framework.

Mr. Stanley recommends a system that is very different from the existing approach – it is intended to be simple, transparent and easier to administer.

Funding Fairness to Pricing Fairness

Based on the recommendations contained in the Funding Fairness report, the WSIB undertook jurisdictional analysis of best practices related to employer classification and premium rate setting. Concurrently, Special Advisor, Doug Stanley led a comprehensive consultation with stakeholders providing an opportunity for discussion on the development of a new Rate Framework. This culminated in his Pricing Fairness report (Feb 2014), which included recommendations to reform current employer classification, rate setting and experience rating approaches.

Proposed Preliminary Rate Framework

The WSIB has developed a proposed preliminary Rate Framework, considering the recommendations in the Pricing Fairness report and working with Morneau Shepell as external actuarial advisors. It is a representation of a plausible Rate Framework in line with Stanley's recommendations and the WSIB's own analysis. A number of options and variations have and could be considered based on further analysis and engagement with stakeholders.

Moving into 2015 and Beyond

Upon describing a proposed preliminary Rate Framework, the WSIB will undertake further stakeholder engagement on a proposed preliminary Rate Framework that will begin in early 2015.

The WSIB will review various options and perspectives as it considers Rate Framework reforms. Recommendations will be developed for consideration by its Board of Directors.

The WSIB is committed to engaging stakeholders in the future to consider the transitional features of any potential Rate Framework reforms.