Calif. Regulator Says Comp Insurers Keeping Rates Low

NU Online News Service, Dec.10, 8:39 a.m. EST

California Insurance Commissioner Steve Poizner announced that workers' compensation insurance rates in the state will be relatively stable and increase by an average of only 4 percent in 2010.

Last month the commissioner rejected an insurance industry request to increase his advisory Workers' Compensation Claims Cost Benchmark by nearly 25 percent.

Mr. Poizner declared in a statement that the latest data on comp insurance rates "proves that the double-digit increase I rejected was flat-out unwarranted."

"This is great news for the small business owners across our state," he remarked, adding "It's unfair for the insurance industry's inefficiency to lead to higher rates for employers who are struggling during the recession. This latest data reinforces my view that when forced, insurance companies have found a way to use tools already available to reduce costs and minimize rate changes."

For the second time last month, Commissioner Poizner rejected a request for a rate increase in the Workers' Compensation Claims Cost Benchmark- this time for 22.8 percent.

The department said its latest analysis of rate change requests looked at the top 100 workers' comp insurance companies, representing 97.1 percent of the comp insurance market.

That analysis found that 41 companies did not make new rate filings; indicating they want to keep the same rates and therefore, are not required to make a new rate request.

Fifty-nine companies have made new rate filings for next year. Out of those, four filed for rate decreases ranging between 8.4 percent and 1 percent, 13 companies filed for no overall rate change and the other 42 companies have filed for rate increases between 0.6 percent and 12 percent.

The straight average rate increase for all 59 companies is 4.1 percent, and when weighted for market share, the premium weighted average rate increase is 4 percent. This last calculation does not include the State Fund.