State Compensation Insurance Fund on Monday announced it has filed with the California Department of Insurance an average rate decrease of 5 percent on new and renewal workers’ compensation policies with renewal dates on or after Jan. 1, 2005. This is in addition to separate decreases of 2.9 percent and 7 percent already taken. Therefore, employers renewing between Jan. 1, and June 30, 2005 will receive an average decrease of 12 percent.
In announcing the decrease, State Fund President Dianne Oki said, “This latest decrease reflects State Fund’s continuing commitment to pass on expected savings from recent workers’ compensation reform legislation.”
While average decreases will be 5 percent, individual policyholders will also be affected by a number of other changes including individual class experience, experience modifications and rating plan features. Therefore, some policyholders will experience a greater — while others will see less — than the average 5 percent decrease.
State Fund Executive Vice President James Neary said, “This is the third in a series of rate decreases which reflect the positive impact of the Governor’s and Legislature’s recent workers’ compensation reform measures. In the New Year, the workers’ compensation system will see the introduction of carrier managed medical provider networks and a revised system for evaluating permanent disability. When combined with earlier reforms, we expect the changes to put the brakes on escalating costs. We will continue to monitor the impact of reform and I believe it holds the potential for further cost relief for California employers, who in recent years, have been burdened by the nation’s highest workers’ compensation rates.”
Oki added, “To fulfill its Legislative mandate and mission, State Fund must ensure it has the financial strength to meet its obligations to California employers and their injured workers for years to come. This rate filing achieves that objective while providing additional rate relief to our policyholders. We will continue to make the delivery of benefits to injured workers as effective and efficient as possible.
“Over the past five years, State Fund experienced unprecedented growth due to the most dramatic workers’ compensation marketplace contraction in California history. More than two-dozen private carriers went insolvent, while others abandoned the market. However, there are now significant signs of a return to normality in the marketplace as an increasing number of private carriers are once again willing to write this important coverage. This provides employers with choices as well as the inherent benefits of a competitive market. I’m very pleased that we are continuing to make progress in the right direction.”
Was this article valuable?
Here are more articles you may enjoy.