Workers’ Compensation Premium Reduction Recommended
The Workers' Compensation Insurance Rating Bureau on Wednesday recommended a 6.3% reduction in premiums for policies renewed or beginning Jan. 1, the Contra Costa Times reports.
The reduction is "far less than the last few rounds of proposed rate decreases," the Times reports. For example, the bureau recommended a 16.4% premium reduction for policies beginning in July and a 15.3% reduction for policies beginning in January 2006.
Jack Hannan, a spokesperson for the rating bureau, said the latest reduction represents the "full effect" of workers' compensation reforms enacted in 2004. According to Hannan, businesses "are less likely to continue to see the big decreases in the future." He added, "Over time, you will start to see the normal ebb and flow of rate changes."
Hannan also said that rates could increase in January depending on whether Gov. Arnold Schwarzenegger (R) signs a bill (SB 815) that would double the amount of payments made to permanently disabled workers. The bureau would recommend a 1.8% increase in premiums if the legislation becomes law.
However, the Times reports that the governor is expected to veto the measure.
Insurance Commissioner John Garamendi (D) said he would make a final recommendation on rate changes to the workers' compensation industry after Schwarzenegger acts on the legislation and after hearing testimony on the bureau's proposed rate reduction (Avalos, Contra Costa Times, 9/14).