California Insurance Commissioner John Garamendi, whoserecommendations have been largely ignored by insurers, yesterdaycalled for a fourth consecutive decrease in workers' compensationpremium rates, this time by 15.3 percent.

This latest non-binding recommendation would bring to 46.2 thetotal reduction in premiums that the commissioner has called forsince workers' compensation reforms were enacted in California in2003.

Mr. Garamendi's proposed decrease is less than that called forby the state Workers Compensation Insurance Review Board, whichasked for a 15.9 percent decrease in pure premium.

Mr. Garamendi's call for a reduction is only advisory, and hehas expressed concern over what he sees as insurers takingadvantage of the savings brought by reforms rather than passingthem on to their customers.

In making yesterday's announcement, he noted that his priorreductions totaled 36.5 percent, while insurers had only cut rateson average by 26.7 percent.

"This does not compute," he said. "Insurance companies arecurrently paying just 38.5 cents of every premium dollar theycollect for the care of injured workers. It's obvious that thesavings are there--insurers simply need to pass them on."

Mr. Garamendi's criticism of the insurers has drawn fire fromthe industry, even prior to the latest announcement. Sam Sorich,president of the Association of California Insurance Companies,said that such claims paint an unfair portrait of the workers' compinsurance market, adding that it provides only "a snapshot intime," and often doesn't take into account recent rate changes.

Additionally, many insurers, including the state insurer of lastresort that controls roughly half of the workers' compensationmarket in California, have used the savings to build reserves.

Overall, however, the reforms enacted in California have helped,Mr. Garamendi said, by stopping what he called an "up-escalator" ofrising workers' comp costs that were slowing state's economy.

"The turnaround provided by this legislation is significant andgreat news for our state's economic health," Mr. Garamendi said."Insurers should recognize that the additional savings nowavailable could be the fuel that injects even more life into ourrecovering economy." However, the commissioner also noted that, asthe reforms made by the most recent legislation, SB 899, take fulleffect, the pace of decreasing rates could slow somewhat.