Insurance Commissioner Harold C. Yancey has approved an average rate increase of 11.3 percent for 1991 for workers' compensation premiums.

The National Council on Compensation Insurance had recommended a 15 percent increase.One factor that has a great impact on workers' compensation rates is inflation. This year the general inflation rate has been between 5-6 percent, and medical cost inflation reached as high as 12 percent, he said.

Regarding medical costs, Yancey said 60 percent of every dollar in workers' compensation benefits goes for medical costs with the remainder going to pay lost wages and other similar type benefits. This is the highest percentage for medical expense in the Intermountain Area.

That has prompted the Insurance Department to study the medical cost issue early next year.

Yancey found the overall average workers' compensation rates in Utah are lower than the rates in surrounding states. Of the 71 major classifications compared, Utah was higher in two and significantly lower in the other 69.

"Generally, we have a healthy workers' compensation system in Utah, but annual rate increases are no longer the answer. Much more effort and attention must go to preventing accidents and injury in the workplace," Yancey said.

Employers who invest in safety and loss prevention will be rewarded with lower premiums through experience credits that are available.