Workers’ Compensation Insurance Premiums to Increase Again

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, June 20, 2003 Share this on FacebookTweet thisEmail this to a friend

Insurance Commissioner John Garamendi issued a decision on the Workers’ Compensation Insurance Rating Bureau’s July 1, 2003 pure premium rate filing, which is more bad news for employers. The Commissioner approved a 7.2% increase in pure premium rates that would be applicable to all new and renewed policies with an anniversary date on or after July 1, 2003. The 7.2% increase is the second successful mid-term filing following the 10.1% increase on July 1, 2002.

Unfortunately, the pure premium rate does not tell the whole story. The pure premium rate only covers the projected cost of insurance and does not include insurer expenses and overhead. As a result, the actual rate increase to employers is likely to be significantly higher especially if the rumor about the California State Insurance Fund (SCIF) mid-term rate increase is true. The rumor on the street is that SCIF will raise its rate by 23% on July 1, 2003. That would make them a lot less attractive to many employers because it would put them on par with private insurers. The down side of all this is employers will have to pay even more for workers’ compensation insurance.

About the only positive thing that can be said about the rate increase is that it may reinvigorate employers to contact the Governor and legislators demanding workers’ compensation reforms.
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