California Commissioner Asked to Raise Workers’ Compensation Rate

By | August 12, 2010

The California Workers’ Compensation Insurance Rating Bureau’s Governing Committee has approved the recommendation to allow the pure premium rate in the state to rise by 29.6 perent, as was expected and widely reported.

The Committee’s recommendation now goes to state insurance commissioner, Steve Poizner, who would actually implement the increase. Poizner has rejected two previous, rate increase requests from the Bureau made in the past year.

Gov. Arnold Schwarzenegger already has sent a letter to the commissioner’s office, according to the Sacramento Business Journal. It asks him to reject the request because it would be too big a burden on businesses struggling in the current economic climate.

In a release announcing the Committee’s decision to make the 29.6-percent recommendation, the Bureau notes that even if an increase that large goes into effect, rates would still be about 53 percent lower than they were in 2004, at the peak of the market, when the state had an acute workers’ compensation crisis. Gov. Schwarzenegger reorganized the system in that year.

An employers group on Wednesday indicated that it would probably object to the 29.6 percent increase, but it knows some kind of a large increase must come, according to the Sacramento Bee newspaper.

Jerry Azevedo, a spokesman for the Workers’ Compensation Action Network, told the paper that a rate increase is warranted, although the 30 perent would be a dramatic increase for California employers.

Insurance companies have said their costs have been rising because medical costs are rising.

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