Workers’ Compensation Bureau To File for Advisory Insurance Rate Increase
The Workers' Compensation Insurance Rating Bureau this week is expected to file with the Department of Insurance a 3.5% advisory rate increase for workers' compensation policies, the Oakland Tribune reports. The rate increase would apply to policies scheduled for renewal after Dec. 31 and would serve as a "benchmark" for insurers in setting premiums, according to the Tribune. Insurance Commissioner John Garamendi (D) must first approve the recommendation. However, the recommended rate increase would represent a "turnaround" from Garamendi's recommended premium rate reduction of 20.9% issued in May after the approval earlier this year of a workers' compensation reform law (SB 899), the Tribune reports. Rating Bureau officials cite a bill (AB 749) requiring higher weekly benefits for injured workers as contributing to higher indemnity benefits and the need for higher premiums. The maximum disability benefit is set to increase to $840 per week in 2005 from $490 per week in 2002, before the law was passed.
Rating Bureau officials noted that it is possible that the increase "could be adjusted downward" after it is filed if a permanent disability rating schedule called for in the recently passed workers' comp reform law is established before the end of the year, the Tribune reports. A disability schedule would allow insurers to "use an objective set of criteria" to establish benefits rather than a system that relies on "subjective factors," the Tribune reports. Jack Hannan, spokesperson for the Rating Bureau, said, "If [the disability schedule issue] is resolved prior to January 1, then we will do our best to include that in the rate. If we get it December 30, we're not going to get that done." Officials have scheduled public hearings on the proposed increase in San Francisco in September (Mitchell, Oakland Tribune, 7/23).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.