Most workers' compensation insurers in California are loweringtheir rates as they file for July renewals, with many going aboveand beyond Insurance Commissioner John Garamendi's call for an 18percent reduction in pure premium rates.

Roughly 89 percent of the filings received by the Department ofInsurance during the first three weeks of June included a decreasein pure premium with the majority of those at or above Mr.Garamendi's recommended reduction.

Of the others, approximately 7 percent were keeping their ratesthe same and the remaining 4 percent were increasing rates. Rateincreases filed were as high as 3.3 percent, while the largestdecrease, filed by both the Maryland Casualty Company and ZurichAmerican Insurance Company of Illinois, was 26.1 percent.

The rate decreases are widely viewed as the result of a slew ofreforms passed within the last two years that were designed tostabilize what had been characterized as an inconsistent systemthat subjectively rated injuries.

Under the reforms, worker disability is now judged according tomedical criteria and some benefits, such as chiropractic visits,have been limited.

"Two years ago decreases like this were unimaginable," said KenGibson, vice president of the Western Region for the AmericanInsurance Association. "The reforms are working to control costsand return predictability, stability and objectivity back toCalifornia's system."

The reforms have, and continue to face stiff opposition, mainlyfrom the California Applicants Attorneys Association, whose membersrepresent injured workers, and the worker advocacy groupVotersInjuredatWork.org.

The groups have filed several legal challenges to aspects of thereforms, such as the permanent partial disability criteria, whichare making their way through the state court system.

Workers' comp insurers are facing another, potentially moreserious challenge in the state legislature, where some lawmakershave criticized insurers for not reducing rates swiftly enough asthe reforms were enacted.

Sen. Richard Alarcon, D-Sylmar, who chairs the Senate Labor andIndustrial Relations Committee, has introduced a bill known as SB46 that would re-regulate workers' comp rates.

Mr. Gibson said the bill "is an irresponsible and unwarrantedmeasure that completely ignores what is actually happening inCalifornia's marketplace."

"Despite litigation efforts by labor and applicants' attorneysto undermine the reforms, employers are finally seeing the benefitsnow that the regulations have been developed and implemented," headded. "Instituting government price controls will result indistorted and dysfunctional markets, restricted flow of capital inthis state, and fewer choices for employers."