The California Insurance Commissioner rejected Increase rate for Workers' Compensation Insurance Pre

The California Insurance Commissioner rejected a call by industry financial analysts for a 28% increase in workers' compensation insurance premiums, which are paid by most of the state's employers. Instead, he recommended that rates stay flat. He suggested that insurers could do much more to cut costs by adopting a number of reforms authorized by the Legislature six years ago.

Though the disapproval is not binding on California's 207 licensed workers' compensation insurance providers, recommendations are generally heeded by the major carriers. Most of the 28 companies that already have submitted rate requests for next year are seeking increases of 2% to 3%. California's largest workers' compensation carrier, the government-backed State Compensation Insurance Fund, is seeking a 5.2% overall rate increase in 2011. The company, known as State Fund, serves as the insurer of last resort in the mandatory workers' compensation system, with 180,000 customers and $1.3 billion in premiums. Employers paid $2.36 per $100 of payroll costs last year, compared with a record high of $6.44 in 2003 before the Legislature approved a landmark overhaul of the multibillion-dollar system.

Source: LA Times

COPYRIGHT © 2010 KCAL INSURANCE