Rate Regulation Possible In Workers Comp Reform
A state Senate committee chairman is threatening workers´ compensation insurers with rate regulation if reforms adopted earlier this year don´t translate into savings for employers.
Senator Richard Alarcon of Van Nuys says lawmakers will take that step if insurers force their hand. Alarcon was one of the authors of legislation passed earlier this year to cut the skyrocketing costs of workers´ comp insurance that most employers are required to buy.
Insurance Commissioner John Garamendi has suggested those changes should result in a cut of nearly 15 percent in insurers´ basic cost of covering workers´ comp cases.
Since Garamendi proposed his rate cut on November 6th, 28 of the more than 200 companies licensed to sell workers´ comp insurance in California have announced reductions in their so-called pure premium rates of up to 17.8 percent. Nine other firms have said they plan hikes as much as 25.7 percent, and 10 insurers have announced they will keep their rates the same.