California Insurance Commissioner Steve Poizner said Friday, October 24, that he had approved a 5 percent workers’ compensation rate increase effective January 1 to reflect rising medical and claims adjustment costs.
The commissioner's action rejects a pure premium increase of 16 percent sought by the Workers' Compensation Insurance Rating Bureau of California. Including the 5 percent increase for January, rates have fallen 63.4 percent since 2003, the commissioner said in a statement.
Although the commissioner cannot dictate insurance rates, he warned underwriters to be cautious if they seek to raise them.
"It is clear that insurance companies remain profitable in California and still have room to reduce the premiums they charge," the commissioner said in his statement. "Insurers should work with their employer customers to control the cost of workers’ comp insurance and help California business remain financially healthy and competitive."
The commissioner also said he was renaming the "Pure Premium Advisory Rate" to the "Workers Compensation Claims Cost Benchmark," as the new term "more accurately describes its role in the work comp pricing system."