Outgoing California Insurance Commissioner John Garamendi saidyesterday workers' compensation insurers are not passing on savingsfrom legislative reforms to employers so he is recommending a 9.5percent rate cut.

The cut he is calling for is -3.2 percent deeper than the -6.3percent recommended by the insurance industry financed Workers'Compensation Insurance Rating Bureau.

Mr. Garamendi, who did not seek reelection and instead is theDemocratic candidate for lieutenant governor, also urged making thesystem more helpful to injured workers.

He said his non-binding advisory recommendation is for policiesgoing into effect after Jan. 1, 2007.

Since July 2003, Mr. Garamendi said he had recommended comp ratedecreases to reduce system costs by a cumulative -55.1 percent andhis latest recommendation would bring the cumulative totalreduction in the cost of claims within the system to -59.4percent.

The decreases, he said, have resulted from a continuing drop inclaims frequency, decreasing total permanent disability paymentsand record low combined loss ratios for the industry.

Insurers, Mr. Garamendi announced, "must pass on all availablesavings to employers. In 2004 and 2005 workers' compensationinsurers spent only .31 cents of each premium dollar to provide forinjured workers. That is an historic low, and an indication thatnot all of the savings are being used to benefit employers.

"I have urged the Legislature and the Executive Branch toaddress these problems. No significant action has yet been taken toresolve them. For that reason, along with the others listed above,I have decided to recommend the -9.5 percent reduction proposed bymy actuaries, and not the -6.3 percent decrease recommended by theWCIRB."

Mr. Garamendi said reforms he and Gov. Schwarzenegger pushedhave helped stop an "uncontrolled escalation of premiums andreduced system costs by more than half."

But, he said, more improvements must be made, "primarily toensure that injured workers receive the care to which they areentitled."

"I, and many others, have heard far too many reports ofsuffering by injured workers who don't receive proper compensation,or who experience unnecessary delays in receiving the medical carethey need," he said. "Though the system is now more financiallystable, it must be improved to deal appropriately with seriouslyinjured workers seeking fair compensation and timely medicalcare."

The commissioner said medical treatment guidelines and autilization review system that his department established to reformthe system are necessary, "but they must be used to help injuredworkers, not to block or delay reasonable and prompttreatment."