2.2% Workers' Comp Premium Reduction

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

Capitol Update, Nov. 19, 2004 Share this on FacebookTweet thisEmail this to a friend

On November 17th, Insurance Commissioner John Garamendi announced a 2.2 percent reduction in the workers’ compensation insurance advisory pure premium rate. According to the commissioner, it is the third premium reduction in a row totaling 22.6 percent since July 2003. The reduction would apply to policies incepting on and after January 1, 2005.

The 2.2 percent reduction comes on the heel of the Workers' Compensation Insurance Rating Bureau's rate filing to the commissioner recommending a 3.5 percent increase in the advisory pure premium rate.

Commissioner Garamendi also commented on the growing concern that insurers have not passed along all of the potential savings to employers in the form of reduced premium. As a result, there is a mounting call for the enactment of rate regulation to force insurers to pass on savings to employers. While the commissioner indicated that he does not support such a proposal, he believes it is clear that unless the savings are given to employers soon, something will be done to require insurers to do so.

None of the savings contributing to the premium reduction is attributed to the recent passage of SB 899 (Charles Poochigian, R-Fresno), last session's major comprehensive workers’ compensation reform measure. The commissioner indicated that it was due to the fact that implementation regulations for SB 899 have yet to be developed. According to the Division of Workers’ Compensation Administrative Director, Andrea Hoch, all regulations will be completed by the end of November 2004.

CMTA believes that once the regulations implementing SB 899 go into effect, employers will begin to see substantial savings in workers’ compensation costs.
Read more Workers' compensation articles

Capitol updates archive 989898989