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

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

Of the others, approximately 7 percent were keeping their rates the same and the remaining 4 percent were increasing rates. Rate increases filed were as high as 3.3 percent, while the largest decrease, filed by both the Maryland Casualty Company and Zurich American Insurance Company of Illinois, was 26.1 percent.

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

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

"Two years ago decreases like this were unimaginable," said Ken Gibson, vice president of the Western Region for the American Insurance Association. "The reforms are working to control costs and return predictability, stability and objectivity back to California's system."

The reforms have, and continue to face stiff opposition, mainly from the California Applicants Attorneys Association, whose members represent injured workers, and the worker advocacy group VotersInjuredatWork.org.

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

Workers' comp insurers are facing another, potentially more serious challenge in the state legislature, where some lawmakers have criticized insurers for not reducing rates swiftly enough as the reforms were enacted.

Sen. Richard Alarcon, D-Sylmar, who chairs the Senate Labor and Industrial Relations Committee, has introduced a bill known as SB 46 that would re-regulate workers' comp rates.

Mr. Gibson said the bill "is an irresponsible and unwarranted measure that completely ignores what is actually happening in California's marketplace."

"Despite litigation efforts by labor and applicants' attorneys to undermine the reforms, employers are finally seeing the benefits now that the regulations have been developed and implemented," he added. "Instituting government price controls will result in distorted and dysfunctional markets, restricted flow of capital in this state, and fewer choices for employers."

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