California Insurance Commissioner Dave Jones (D) has recommended an average pure premium rate for the state workers’ compensation program that is lower than the state Workers’ Compensation Insurance Rating Bureau’s proposal, the Central Valley Business Times reports.
Details of Recommendation
Jones advised that $2.74 per $100 of payroll be spent on workers’ compensation. WCIRB had recommended a rate of $2.77 per $100 (Central Valley Business Times, 11/14).
The state Department of Insurance recommended a lower rate because of anticipated savings from a state law (SB 863) related to the state workers’ compensation program (DOI release, 11/14). The law changed the formula used to calculate benefits for injured workers, increasing their compensation by an average of 29%. It also eliminated benefits for certain health conditions that often are subject to lawsuits (California Healthline, 5/13).
According to a release, Jones and WCIRB acknowledge that SB 863 has resulted in savings among the workers’ compensation program. However, as insurance losses outpace wage increases, Jones said the advisory pure premium rate is likely to increase in 2015.
Under state law, the insurance commissioner does not have the authority to regulate insurance rates, but can offer recommendations as to what premiums are appropriate (DOI release, 11/14).