California Insurance Commissioner John Garamendi has announced he will likely recommend a further workers’ compensation insurance pure premium rate cut of at least 6.3 percent—which would bring the cumulative rate decreases to 58 percent since workers’ comp reform measures were implemented back in 2003.
Garamendi said the success of the reforms is unprecedented. “The reforms laid out in my Roadmap, along with further reforms signed by Governor Schwarzenegger, have cut costs by more than half. No other state has enacted reforms that reduced workers’ compensation costs to this degree.”
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The commissioner based his statements on recent figures from the Workers’ Compensation Insurance Rating Bureau (WCIRB), which show insurers now only spend about 59 cents on claims and expenses for every dollar earned in premiums. That contrasts with a whopping $1.87 spent by insurers per premium dollar back in 1999. And, while employers were spending an average of $5.39 for every $100 in payroll in January 2004, the WCIRB projects the figure will slide to just $2.03 per $100 in payroll if the 6.3 percent recommended rate decrease is implemented.
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