Employers Direct Insurance Company (EDIC) announced another round of workers’ compensation rate reductions for California employers, bringing the total decrease to 20.9 percent from a year ago. The latest rate reduction is effective immediately for employers with effective dates of June 10, 2004 or later. Employers Direct (www.edicwc.com) is a California-based specialty carrier that insures select employers who pay at least $75,000 per year in annual workers’ compensation premiums.
“This latest round of reductions is in direct response to the reforms passed by the legislature under the leadership of Governor Schwarzenegger,” stated James E. Little, chairman, president and CEO of Employers Direct. Little also pointed out that the 20.9 percent reduction is the full amount requested by Insurance Commissioner Garamendi.
“This is more than double the 9.7 percent rate decrease the State Compensation Insurance Fund will provide to its policyholders,” Little added, “and while the State Fund, like us, is now making a seven percent rate reduction, their action is not effective until July 1st, which means that employers with policy effective dates in June 2004 will not see the benefit of the latest State Fund rate reduction until next year.” Employers Direct’s rate reduction will immediately reduce premiums for employers with policy effective dates of June 10th, 2004 or later.
“Since the reforms are already partially in effect, we requested the California Department of Insurance to allow us to make our rate reduction available as soon as possible because it’s the fair thing to do for the huge number of California employers with workers’ comp policy effective dates between June 10th and June 30th,” Little said.
“The amount of energy, commitment and sacrifice by all the parties to bring these reforms about was a milestone in modern California history and we want the Governor, legislators, Insurance Commissioner and employers to know that there are insurance companies willing to step up to the plate and do the right thing,” said Ron Groden, vice chairman and co-founder of Employers Direct. He also points out that Employers Direct is a direct writer and its costs are lower because it does not have to pay the large commissions that brokers charge to sell workers’ comp insurance for the State Fund and most other carriers.
“We believe the corner has turned in California workers’ comp for those employers and carriers that are willing to work together,” said Little, adding, “fortunately, as a newer company, we can get those savings to our policyholders immediately, while the carriers that experienced the cut-throat competition of the late ’90’s may need to keep a portion of the reform savings to make up lost ground on their balance sheets.”
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