Which entity sets the worker's compensation manual rates?

The entity that sets the worker's compensation manual rates is the state. Each state regulates its workers' compensation system, which includes establishing the rates that insurers must use when calculating premiums for employers. These rates are determined based on various factors, including industry classifications, claims history, and overall economic conditions within the state.

While insurance companies may utilize these rates to calculate their premiums and may adjust their rates within the parameters set by the state, they do not have the authority to determine the base manual rates themselves. Additionally, the federal government and local municipalities do not set workers' compensation manual rates; instead, they may have roles in overseeing or regulating broader labor laws and practices. Therefore, the correct choice reflects the primary role of state entities in regulating workers' compensation rates.