State Compensation Insurance Fund – California’s largest workers’ compensation insurance carrier – has filed for an average 2.9 percent rate decrease effective Jan. 1 2004. The decrease is within the range recommended by the Workers’ Compensation Insurance Rating Bureau on Nov. 3, 2003.
The 2.9 percent reduction follows a rollback of the projected 12 percent increase previously requested by the Workers’ Compensation Insurance Rating Bureau.
“The combined impact of eliminating the pending increase and reducing rates by an additional 2.9 percent should give California employers some hope for stability in the marketplace,” said State Fund President Dianne C. Oki.
Executive Vice President James F. Neary cautioned that some policyholders will not see an actual rate decrease on Jan.1 2004. This is due to the fact that the July 1 2003 rate increase has not yet been applied to policies with inception dates between January and June. Rates will vary among policies due to differences in individual class experience. Experience modifications will further modify the rates of qualified policyholders, noted Neary.
Oki added, “State Fund must ensure it maintains the financial resources to meet our obligations to California employers and injured workers. State Fund and other carriers are bound by California insurance law to set adequate rates. This rate filing does just that.”
State Fund hopes for substantial savings from current and future reform legislation and will continue to work with the Legislature and the new Governor to achieve further rate relief for employers and guarantee that workers’ compensation services are delivered as efficiently as possible.
“State Fund will review its experience and cost savings as a result of the new workers’ compensation laws in mid-2004,” Oki said. “Consideration will be given at that time for further rate reductions based on demonstrated savings. The financial health of State Fund is critical to California’s workers’ compensation system. State Fund’s current rate filing is absolutely essential to its financial health.”