Workers’ Compensation Insurance Rating Bureau Recommends 3.5% Increase in Premium Rates for 2005
The Workers' Compensation Insurance Rating Bureau, a not-for-profit group that represents insurers and recommends premium rates, on Wednesday at a hearing recommended that insurers increase workers' compensation insurance premium rates by 3.5% for policies written or renewed on or after Jan. 1, 2005, the San Francisco Chronicle reports. Insurance Commissioner John Garamendi (D) presided over the hearing.
WCIRB officials said their recommendation accounted for the effects of laws enacted last year by former Gov. Gray Davis (D) to reform the state workers' compensation insurance system. However, the recommendation does not include potential effects of a law enacted in April by Gov. Arnold Schwarzenegger (R) because "implementing regulations have not yet been published," such as rules on permanent disability awards for workers and the creation of networks of medical providers for companies that handle their own workers' compensation insurance claims, according to the Chronicle (Abate, San Francisco Chronicle, 9/16).
Division of Workers' Compensation Director Andrea Hoch said the Schwarzenegger administration will draft the first set of regulations by Nov. 1 and will release rules related to permanent disability awards for workers by Jan. 1 (Lifsher, Los Angeles Times, 9/15).
Garamendi will hold an additional hearing on workers' compensation insurance premium rates next month (San Francisco Chronicle, 9/16). He plans to issue his nonbinding premium rate recommendation to workers' compensation insurers in November (Chan, Sacramento Bee, 9/16).
Labor union officials said that they would call for legislation to regulate workers' compensation insurance premium rates in the event that they do not decrease next year (Lifsher, Los Angeles Times, 9/16).
Garamendi said that workers' compensation insurance premium rates likely will decrease in January, adding, "There are savings not yet recognized."
Theo Pahos of the Association of California Insurance Companies said, "We think rates are trending down," adding, "We don't know how much until those regulations are in place" (Sacramento Bee, 9/16).
Angie Wei, legislative director of the California Labor Federation, said, "We are outraged." She added, "Claims are down, medical costs are down. ... How is it that rates could be going up?" (San Francisco Chronicle, 9/16).
KQED's "The California Report" on Thursday will include a report on the lack of large reductions in workers' compensation insurance premium rates and complaints by injured workers' about reduced benefits since the enactment of the reform laws. The segment includes comments from Garamendi; Sen. Chuck Poochigian (R-Fresno); Sam Sorich, president of ACIC; and California workers and small business owners (Goldberg, "The California Report," KQED, 9/16). The complete KQED segment will be available online in RealPlayer after the broadcast.
A transcript of the segment broadcast recently by KPBS' "KPBS News" is available online. The complete KPBS segment is available online in RealPlayer (Goldberg, "KPBS News," KPBS, 9/6).