Senator Requests Immediate Workers’ Compensation Rate Cuts
As expected, Sen. Richard Alarcon (D-Van Nuys) on Wednesday requested that workers' compensation insurance carriers immediately reduce premium rates, the Sacramento Bee reports (Chan, Sacramento Bee, 3/11). Alarcon called for the cuts after the Workers' Compensation Insurance Rating Bureau on Tuesday announced that its 2004 projected total losses for workers' compensation insurance carriers would decrease by $7 billion to $17.9 billion. Late last year, the bureau estimated that California workers' compensation losses in medical and indemnity payouts to injured workers would be $24.9 billion in 2004 (California Healthline, 3/10). Alarcon said, "The simple message is that insurance companies need to stop gouging employers throughout the state. They should give them their money back in lowering the premiums, and I believe they should also explore providing rebates to employers" (Lawrence, AP/Orange County Register, 3/11). "When the governor says he wants to find $11 billion in savings in the system, I'm saying we just got $7 billion," Alarcon added (Gledhill, San Francisco Chronicle, 3/11). Insurance Commissioner John Garamendi (D) also said that workers' compensation insurance carriers should "do their part and pass on the savings to employers. Employers can't wait any longer for premium relief." Garamendi said that the Insurance Department is creating a system to identify which insurers "are not appropriately reducing their rates," the San Diego Union-Tribune reports (Calbreath, San Diego Union-Tribune, 3/11). However, insurance industry officials said that Alarcon and Garamendi are "misinterpreting the new information" from the rating bureau, the Bee reports (Sacramento Bee, 3/11). Nicole Mahrt, regional director of public affairs for the American Insurance Association, said, "It's a preliminary number. We really don't know what it means." She added, "The fact is that the industry is still hemorrhaging billions of dollars. This may mean that we'll be hemorrhaging a couple billion less" (San Diego Union-Tribune, 3/11). Jack Hannan, a spokesperson for the rating bureau, said that the $7 billion revision is not "going to impact what people are paying for their workers' compensation" insurance (Sacramento Bee, 3/11). KQED's "California Report" Thursday reported on WCIRB's release (Myers, "California Report," KQED, 3/11). The complete segment will be available online after the broadcast.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.