California anticipates lowering workers’ compensation insurance rates 6.3 percent

California Insurance Commissioner John Garamendi announced on Sept. 28 that he will likely recommend a further reduction in the state’s workers’ compensation insurance rates of at least an additional 6.3 percent.

Based on pre-reform trends, the Workers’ Compensation Insurance Rating Bureau (WCIRB) estimates that such a reduction would result in cumulative savings to the system of $10 billion to $14 billion since 2003. According to the WCIRB, the Commissioner’s approval of a 6.3 percent drop in the pure premium rate will result in an overall reduction of 58 percent in the rate since 2003.

The significant reductions were spurred by legislation that cut system costs substantially, the Commissioner’s office said. Successful reforms were first signed into law by Gov. Davis, and were followed by additional legislation signed into law by Gov. Schwarzenegger, according to the commissioner’s office.

The Commissioner also renewed his recommendation to the legislature and Governor to enact changes addressing workers’ comp problems that still exist. Technical flaws have reduced indemnity payments for seriously injured workers by some 50 percent from pre-reform levels, he said. Those flaws can be corrected through a minor change to the current regulations. Problems with respect to unfair delays in the treatment of legitimately injured workers, and in the updating of medical treatment guidelines must also be addressed, he indicated.