Workers’ Comp Rates Still Debated

Times Staff Writer

A key insurance rating organization on Monday recommended cutting California workers’ compensation premiums as much as 5.3% on average, based on landmark reform legislation passed in September.

But the decrease wasn’t enough to satisfy Insurance Commissioner John Garamendi, who signaled he would push the insurance industry to make even heftier rate cuts than those suggested by the Workers’ Compensation Insurance Rating Bureau.

This week, Garamendi will issue the Department of Insurance’s official rate recommendation for workers’ compensation policies.


The legislation’s architects have projected annual savings of $5 billion to $6 billion, which Garamendi says should justify a major reduction in employer premiums. But those savings haven’t been borne out by the rating bureau, an industry-funded organization that studies the state’s workers’ comp system. In September, the rating bureau announced that it could project only about $4 billion in annual savings, enough to justify a 2.9% recommended rate rollback.

At the time, the rating bureau said it couldn’t quantify the financial effect of many of the proposed reforms. At a hearing in San Francisco on Monday, the rating bureau said it found more than a half-billion dollars of additional savings. It recommended a rate rollback of 2.9% to 5.3%.