Garamendi Plans Hearings To Address Workers’ Compensation Insurance Pricing
Insurance Commissioner John Garamendi (D) on Thursday said he would convene hearings to address pricing practices of workers' compensation insurers because premiums have not declined by as much as he has recommended, the Sacramento Bee reports. Garamendi also renewed his call to reform the State Compensation Insurance Fund, which he says has contributed to inflated premium rates.
Garamendi said that few small businesses have seen premium reductions despite new regulations introduced in January that imposed new fee schedules and guidelines to determine treatment and benefit payments.
Garamendi said, "The insurance industry wants to fatten its profit margin. We are in the process of careful monitoring where the insurance companies are going with their premiums and their costs."
Garamendi has recommended reductions totaling 24% since January 2004, but workers' compensation insurers have reduced rates by an average of 14% to 17%. Garamendi's recommendations are nonbinding and serve only as benchmarks for the industry.
Insurers have said that they have experienced losses over the last decade and a market improvement last year will bring new carriers and increased competition to the state.
American Insurance Association spokesperson Nicole Mahrt said, "We've seen a 40% shift (in rates) in two years. Employers will really start to see a difference in the bill they will see in July" (Chan, Sacramento Bee, 5/20).
KPBS' "KPBS News" on Friday reported on workers' compensation insurance costs in California. The segment includes comments from Steve Hopcraft, media director for California Applicants' Attorneys' Association (Goldberg, "KPBS News," KPBS, 5/20). The complete transcript is available online. The complete segment is available online in RealPlayer.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.