Aug. 27--ALBANY -- Employers should see the rates they pay for workers' compensation insurance fall another 5 percent on average next year, Gov. David Paterson announced Tuesday.

The decline follows a 20.5 percent average decrease this year.

Maximum weekly benefits to workers will increase to $600 next year. They're currently at $550.

The declines follow a number of reforms to the workers' compensation system enacted two years ago that were intended to reduce costs of premiums while providing more benefits for employees injured on the job.

The reforms include a streamlined system to resolve contested claims and reduce administrative costs, fee schedules and supplier networks to help control medical costs, and stepped-up efforts and tougher penalties to reduce fraudulent claims.

In addition to the boost in maximum weekly benefits to $600 next year, they will rise to a level equal to two-thirds of the statewide average weekly wage in 2010, and then be indexed annually.

The state Insurance Department sets a base rate, with private insurance companies adding their operational costs to that figure, said department spokesman David Neustadt. Competition among insurance companies is intended to keep those additional costs as low as possible.

"Encouraging insurance companies to compete by being more efficient is just one of the reforms we are implementing," said Insurance Superintendent Eric Dinallo.

The 5 percent reduction is an average of rates to be charged next year, Neustadt said.

The declining premiums in the traditional market for workers' compensation insurance come as employers in so-called self-insured trusts are seeing their own coverage costs increase.

That's because of the default of several trusts and new legislation that assesses healthy trusts some of the costs from those that failed. At least a dozen trusts -- groups of employers in similar lines of business paying into a pool that covers their workers' compensation claims -- have decided to dissolve.

Richard Flaherty, president and CEO at Latham-based First Cardinal Corp., which administers self-insured trusts, said new state regulations that hold healthy trusts liable for the obligations of defaulted trusts posed a risk that was too great to manage, and ultimately threatened the competitiveness of the trusts going forward.

"We like to manage risk and we have no control over that risk," he said in a mid-August interview. Anderson can be reached at 454-5323 or by e-mail at eanderson@timesunion.com.