California Insurance Commissioner Dave Jones issued a formal finding today that costs to insurers in the workers’ compensation system are declining and he’s asking workers’ comp insurers to pass those cost savings on to employers in the form of lower rates.
Jones today issued a workers’ comp advisory pure premium rate of $2.19 per $100 of employer payroll, which is 13.8 percent lower than the pure premium rates filed by workers’ compensation insurers.
Jones, who noted that the state’s workers’ comp reform law, Senate Bill 863, has reduced costs throughout the state’s workers’ comp system, has no authority to regulate workers’ comp rates. He can only make recommendations.
“Insurers’ net costs in the workers’ compensation system continue to decline as a result of SB 863 and other reform laws enacted by the Legislature and Governor Brown, which is good news,” Jones said in a statement. “Workers’ compensation insurers should pass these cost savings onto employers, but there is no legal requirement that they do so, and workers’ compensation insurers continue to file pure premium rates that are higher than the pure premium rate warranted by their costs.”
Jones’ request follows the Workers’ Compensation Insurance Rating Bureau’s pure premium advisory rate filing for Jan. 1, 2017. Data filed by the WCIRB concluded that insurers’ filed pure premium rates are higher than needed.
The commissioner’s newly issued pure premium rate includes projected savings as a result of recent anti-fraud legislation in SB 1160 and AB 1244, which limit the ability of medical and other service providers indicted or convicted of fraud in the workers’ comp system to pursue liens against insurers for alleged failure to reimburse medical expenditures incurred by the indicated or convicted medical or other services providers.
- WCIRB: Los Angeles Workers’ Comp Claims Outlier in California
- California Workers’ Comp Board Submits Amended Rate Filing to Department of Insurance
- California Workers’ Comp Bureau Lowers Rate Filing with Eye on Bills
- California Workers’ Comp Committee Votes for Lower Mid-Year Filing
- California Commissioner Lowers Workers’ Comp Advisory Rate
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