Poizner Won't Budge On Workers' Comp Benchmark Rate Increase

Mr. Poizner said the state does not have any power to control rates and that there is a lot of confusion over the rating process and that he is instructing the WCIRB to change their rate filings and its presentation of cost rate benchmarks to allow for comparative data against actual rates to eliminate confusion.

As an example, he said the industry has increased its own benchmark rates by 36 percent, while the actual rates over the last two years have gone up 2 percent.

"We want better information coming out of the industry and the bureau so that the marketplace has clear guidance for what is going on with the workers comp cost structure," said Commissioner Poizner.

He emphasized the need to keep rates affordable, especially at a time when many businesses are still reeling from the economic downturn.

Commissioner Poizner said that until insurers implement reforms that would cut costs and create greater efficiency, he did not see a reason for granting an increases in the benchmark.

One example he gave of cutting cost and creating efficiency is the institution of pharmaceutical networks. He said drugs are a major cost driver in the workers' comp world, and noted that Safeway and the University of California, both self-insured companies, have instituted such a program and other reforms in increase efficiency.

"Until I see evidence that all of the cost containment reforms have been implemented and efficiencies addressed, why on earth would I want to play any role in providing workers comp companies with any cover to raise rates," said Commissioner Poizner.