CA: Workers' Comp Rate Cut Urged

LA Times ^ | 3/24/05 | Marc Lifsher

[NormsRevenge]

Hard-pressed employers could get a big break on workers' compensation premiums later this year if insurers follow a rate recommendation issued by a key agency Wednesday.

The Workers' Compensation Insurance Rating Bureau in San Francisco, an industry-backed private organization that provides statistical analysis, recommended that insurance companies drop their premiums by about 10% beginning in July. The bureau is expected to make the recommendation official Friday.

If, as is likely, such a cut is reflected in rates submitted by insurance companies to regulators, employers would see the first double-digit decline resulting from a two-year campaign to overhaul the state's system for treating on-the-job injuries.

Counting smaller previous decreases since July 2003, the employers could see a cumulative saving of 31%, John Hannan of the rating bureau said.

The rate recommendation, based on the rating bureau's analysis of the latest actuarial data, confirms that the cost and frequency of injury claims have dropped.

"This is great news for the California economy," said Vince Sollitto, a spokesman for Gov. Arnold Schwarzenegger, who made passage of a bill last April revamping workers' compensation the centerpiece of his first year in office.

The recommended reduction, which must be endorsed by California Insurance Commissioner John Garamendi, provides insurers with a voluntary benchmark for policies that start or renew in the second half of 2005.

Insurers generally follow the bureau's recommendation. Nicole Mahrt of the American Insurance Assn.'s Sacramento office said it "means the reforms are really starting to work."

[elbucko]

The LAT has a new publisher. Wonder why?