NU Online News Service, Nov. 10, 11:20 a.m. EST
California Insurance Commissioner Steve Poizner rejected a 22.8 percent workers' compensation insurance rate increase request yesterday, vowing the rate won't change "one dime" until insurers address avoidable costs in the system.
He announced his move at a press conference yesterday in response to the request by the Workers Compensation Insurance Rating Bureau for a 22.8 percent benchmark rate .
Mr. Poizner said the state of California continues to suffer from high unemployment and that increasing the cost of workers' compensation insurance will only exacerbate the problem.
"I'm very concerned about anything that would increase or result in higher workers' compensation premiums," Mr. Poizner said.
He noted that after WCIRB's previous increase request, the department held a hearing on June 8 to gain more information on medical cost drivers in the system.
"The WCIRB has failed to review or even mention the 27 recommendations to address the medical cost drivers developed in that hearing, and that is a major deficiency in its current request," he said.
Mr. Poizner also said workers' compensation reforms from 2003-2004 have not been fully implemented, and that has helped drive costs as well.
In his decision, the commissioner wrote, "When I see evidence that cost controls from the 2003-2004 reforms have not been fully implemented, inefficiency and less focus on cost-effective medical treatment, I have no choice but to stand up for policyholders and their employees in holding insurers accountable."
While his ruling carries weight, it is purely advisory.
