CAPITOL — Gov. David Paterson on Tuesday said the “successful implementation” of the 2007 workers compensation reform is expected to reduce private carrier workers compensation insurance rates by an average of 5 percent in 2009, adding to the average rate cut of 20.5 percent mandated by state regulators last October.

“Last year’s historic agreement set the framework for workers compensation reform, but the savings are actually produced through the difficult work of developing and implementing the proposals,” Paterson said in a news release.

The 2007 workers compensation reform legislation, brokered by former Gov. Eliot Spitzer while he was still riding high from his landslide election victory in 2006, helped reduce insurance rates by lowering the likely future cost of injured workers claims by capping the time workers with permanent partial disabilities can collect benefits to no more than 10 years. Under the old system they could collect for life. Organized labor accepted this change in return for an increase in the maximum weekly benefit for an injured worker, which had been $400 but is now $550. It will climb to $600 in 2009 and then will be set at two-thirds of the statewide average weekly wage in 2010 and then indexed at that rate thereafter.

Paterson offered no estimate for the amount of money the latest average rate reduction is expected to save employers.

Hampton Finer, deputy superintendant and chief economist of the New York State Insurance Department, said the estimated 5 percent reduction is based on the state’s new formula for calculating workers compensation rates. He said in the past his department mandated a “manual rate” based on the industry average costs for underwriting workers compensation insurance for about 600 different job classifications. Private insurance carriers could either charge that rate or apply for deviations to that rate.

Under that system, Finer said, carriers tended to gravitate to the manual rate. Now, instead of a mandated manual rate, the state is providing a “loss cost” estimate to private insurers based solely on the cost of paying out claims, without regard to average industry administrative costs. Private insurance carriers now file individual rate requests to the Department of Insurance based on a formula using the lost cost figure, allowing the carrier to charge rates that should more accurately reflect market conditions.

“The lost costs are about 75 percent of the [insurance premium] rate. They’re the actual cost of claims. They’re down like 6.5 percent this year, again, on top of last year’s decline of 20 percent,” Finer said.