Insurance Chief Against Hiking Workers’ Comp Rates
On Wednesday, Insurance Commissioner Steve Poizner (R) urged insurers to make no changes to rates for workers' compensation policies next year, citing decreasing costs and profitable returns for insurers, the San Francisco Business Times reports (Rauber, San Francisco Business Times, 11/28).
Poizner said costs for providing benefits and treatment to injured workers have decreased by 70% since reforms to the workers' compensation system four years ago.
He added, "This stability, coupled with a competitive marketplace, should allow insurers to lower premiums that I believe are still too high."
The announcement marks the ninth consecutive time that California's insurance commissioner has called for either a rate cut or no change. The commissioner's suggestion is not binding, but private insurers often consider it a guideline for setting their own rates.
The recommendation contrasts with a 5.2% rate increase proposed by the Workers' Compensation Insurance Rating Bureau in an effort to recover costs associated with managing claims and with a new state law extending the eligibility period for temporary disability benefits (Chan, Sacramento Bee, 11/29).
Meanwhile, the State Compensation Insurance Fund announced earlier this week that it will not raise rates for workers' compensation policies for next year. State Fund is the largest workers' compensation insurer in California, controlling about 32% of the market and collecting $3.6 billion in premiums in 2006 (California Healthline, 11/28).