California Insurance Commissioner John Garamendi reported Thursday that insurers, since the workers’ compensation system reforms went into effect in January 2004, have decreased the rates they file with the Department of Insurance by a cumulative 37.7 percent.
A list of the cost savings by insurance carrier was sent to Legislative leaders on Thursday. It noted that during this same period, the Commissioner has recommended that insurers cut rates by 46.24 percent, based on his analysis of the savings provided by the legislative reforms of AB 227, SB 228 and SB 899.
“The reforms have worked to cut the enormous costs within the system that have so burdened employers,” Garamendi said. “However, much remains to be done. Insurers have not yet passed on enough of the significant savings to employers. This must be done more quickly to help continue the rejuvenation of our California economy.”
Twice each year, the Commissioner assesses the state of the workers’ compensation system and issues a pure premium advisory rate. While many insurers use this as a benchmark, they are not required to follow the recommendation.
According to the latest data available from the Workers’ Compensation Insurance Rating Bureau, the actual rates charged to employers by insurers decreased by 32 percent between January 2004, and Sept. 30, 2005.
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