CA Insurance Commissioner Steve Poizner Announces a 70% Decrease in Insurers' Workers' Comp Costs

Insurance Commissioner Steve Poizner announced today that the workers’ compensation insurance market is enjoying historically high profitability. The workers’ compensation reforms of 2003 have resulted in dramatic decreases in costs and increases in profitability for insurers. Commissioner Poizner also determined that based upon his department’s extensive review and analysis, there should be no change to the workers’ compensation Pure Premium Rates.

“It’s great news that California’s workers’ compensation insurers are enjoying a robust market and extraordinary profitability,” said Commissioner Poizner. “Costs to insurers have plummeted 70% since 2003. This represents a tremendous savings that should allow insurers to give businesses additional relief in the form of lower rates. It is clear that the runaway cost of claims to insurers has stabilized. This stability, coupled with a competitive marketplace, should allow insurers to lower premiums that I believe are still too high. Businesses must also benefit from the decrease in costs to the system. Based on my assessment of the current market, I have determined that there should be no change to the Pure Premium Rates.”

Twice each year the Commissioner assesses the state of the workers’ compensation system and issues a pure premium advisory rate. While many insurers use this as a benchmark, they are not required to follow the recommendation. The actual rates charged to employers by insurers, as filed with the Department of Insurance, decreased by 55% since January 2003.

From: California Department of Insurance (www.insurance.ca.gov)