California’s State Compensation Insurance Fund has filed a mid-year rate plan that reflects a 15 percent increase in collectible premium. The revised rates will apply to new and renewal workers’ compensation policies effective on or after July 1, 2009.
“The principal driver of the premium increase is medical inflation,” said Jan Frank, State Fund CEO and president. Recent Workers’ Compensation Appeals Board en banc decisions Ogilvie v. City and County of San Francisco, Almaraz v. Environmental Recovery Services and Guzman v. Milpitas Unified School District were considered when filing the premium increase, “due to the uncertainty about indemnity costs that it introduces,” said Jennifer Vargen, SCIF communications director.
Medical treatment costs have increased 16 percent annually for the past three years, according to the most recent report published by California’s Workers Compensation Insurance Rating Bureau. Meanwhile, WCAB is currently reconsidering the decisions.
State Fund said its premium levels have fallen significantly since 2003, when Governor Schwarzenegger implemented policy reforms that lowered premiums, and even after this increase, will still be 46 percent below pre-reform levels.
“We understand the strain that California’s businesses are experiencing in the current economic situation,” Frank continued. “State Fund offers group discounts, a merit rating plan, and lower-than-average premiums in some classifications and industries. Because of our size and role in the marketplace, State Fund serves as a stabilizing force in the California economy. State Fund is committed to our promise to California. We will continue to maintain our financial strength, our open door policy of providing workers’ compensation insurance for any employer who needs it, and to provide gold standard service to our broker community and policyholders.
Source: State Compensation Insurance Fund
Topics California Trends Carriers Workers' Compensation Pricing Trends
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