Workers’ compensation insurance rates in California will be relatively stable and increase by an average of only 4 percent in 2010, the Department of Insurance said.
The Department’s announcement comes a month after the Workers’ Compensation Insurance Bureau asked for a 23 percent increase in the Workers’ Compensation Claims Cost Benchmark. California’s State Compensation Insurance Fund recently filed for a 5 percent increase
“This is great news for the small business owners across our state and proves that the double-digit increase I rejected was flat-out unwarranted,” said Insurance Commissioner Steve Poizner. “It’s unfair for the insurance industry’s inefficiency to lead to higher rates for employers who are struggling during the recession. This latest data reinforces my view that when forced, insurance companies have found a way to use tools already available to them to reduce costs and minimize rate changes.”
The Department of Insurance recently analyzed the rate changes requested by the top100 workers’ compensation insurance companies. These companies represent 97.1 percent of the workers’ compensation insurance market.
The analysis found that 59 companies have made new rate filings for next year. Companies who want to keep the same rates do not need to file for new rates. Of those 59 companies, four companies filed for rate decreases ranging between 8.4 percent and 1 percent, 13 companies filed for no overall rate change and the other 42 companies have filed for rate increases between 0.6 percent and 12 percent. The straight average rate increase for all 59 companies is 4.1 percent, and when weighted for market share, the premium weighted average rate increase is 4.0 percent. This last calculation does not include State Fund.
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