Workers' Comp: Premium
Rates Tumble
More
California workers’ compensation carriers
submit rate filings averaging a head-spinning
15 percent decrease in pure premium rates for
policies renewing and incepting on July 1.
That’s the steepest average decrease since
SB 899 took effect last year.
The trend should continue, provided
legislative schemes and frivolous litigation
do not reverse it. Just over 100 carriers have
filed with the California Department of
Insurance, comprising over three-fourths of
the market.
Over 30 carriers filed for an 18 percent
decrease or more. Some of the higher decreases
and their percentage of the California market
share include Zurich American Insurance
Company of Illinois, 26.1 percent, and Zurich
American Insurance Company, 22.7 percent (4.9
percent); The Hartford, 18 percent (1.5
percent); St Paul Travelers Group, 18 percent
(3.7 percent); American International
Group’s eight carriers decreased rates 15.1
percent (6.7 percent); Liberty Mutual
Insurance Company. 14.3 percent (1.8 percent).
The average decrease of 15 percent is slightly
higher than the California Workers’
Compensation Insurance Rating Bureau
recommended rate, and slightly less than
California Insurance Commissioner
Garamendi’s advisory rate decrease of 18
percent. But the fact that carriers are
willing to file for double-digit increases is
a sign of their growing confidence in a market
on the mend thanks in large part to the recent
reforms.
It should also serve as a clear warning to the
legislature that any legislation designed to
cap rates is both counterproductive and,
judging by the July decreases, unnecessary. SB
46 authored by Sen. Richard Alarcon (D-Van
Nuys), scheduled for a hearing in the Assembly
Insurance Committee on Wednesday puts a
ceiling on the rates workers’ comp carriers
can charge.
State Compensation Insurance Fund, the largest
California carrier, earlier announced a 14
percent decrease and Zenith Insurance Company
announced a 12 percent decrease.
(Article
taken from Workers' Comp Executive)
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