STATE FUND SAYS MODEST RATE CUTS ARE LIKELY:

The head of workers’ comp insurer State Compensation Insurance Fund said on May 20 that employers can expect to see only modest premium cuts this year, signaling that the workers’ comp reforms passed in April may take longer to materialize, according to the Los Angeles Times. Dianne C. Oki, president of State Fund, said in a Senate Insurance Committee hearing that she could not promise a big rate cut come July 1, when insurers must file rates for policies that start or renew in the second half of the year. Oki said that the State Fund, which writes about 53 percent of the workers’ comp policies in California, had not yet decided how much it will lower premiums. State Fund is reportedly waiting until Insurance Commissioner John Garamendi releases his own recommendations, expected to come in the near future. Garamendi said that he planned to recommend all workers’ comp insurers reduce their rates by 18 to 20 percent. His recommendation is based upon the workers’ comp savings estimated by the Workers’ Compensation Insurance Rating Bureau. Governor Schwarzenegger, who signed the workers’ comp overhaul legislation in April, said that he expects to see premiums decrease 30 percent as the savings from the reforms are realized. Insurance companies said that it was too soon to commit to significantly lower premiums. Committee members Assembly Speaker Fabian Nunez (D-Los Angeles) and Sen. Jackie Speier (D-Hillsborough) were reportedly disappointed with State Fund’s rate forecast.

Topics Workers' Compensation