HR Management & Compliance

Insurance Commissioner Urges Insurers to Do More to Cut Comp Rates

California Insurance Commissioner John
Garamendi has announced that workers’ compensation insurers in the
state have filed rate reductions averaging 14.6 percent for policies
incepting on or after July 1, 2005. These latest cuts bring the
cumulative rate reduction to 26.78 percent since the massive workers’
compensation reforms of 2003 and 2004.

As a result of new reductions, employers should see lower premium
bills. But, says Garamendi, the premium reductions offered by insurers
are lagging far behind the cumulative pure premium rate cuts of 36.5
percent recommended by him since 2003. Garamendi says insurers should
be able to do more in the way of premium reductions than they have,
given that loss ratios–that is, the amount insurers pay on claims
versus premiums collected–has dropped by 87 percent since 2002.


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