SACRAMENTO – Workers’ compensation insurance rates in California should be lowered by 15.9 percent next year, according to a filing Friday by a key industry group.
While nonbinding, the recommendation by the Workers’ Compensation Insurance Rating Bureau is seen as a statewide benchmark.
And it significantly increases the bureau’s July proposal that 2006 rates be dropped by 5.2 percent.
The difference between the drastically different premium recommendations is simple: more information, according to rating bureau spokesman Jack Hannan.
“We have more data,” Hannan said. “You want to have as much data as possible, especially when the system is going through so many changes.”
The recommendations for lowering workers’ comp rates follow a dropoff in costs to insurance carriers for treating job-related injuries.
“It is great news for employers and further proof the reforms are working,” said Sara Lee, spokeswoman for the California Chamber of Commerce.
A top labor lobbyist said Friday the projected financial savings are encouraging but shouldn’t come at the expense of injured workers, as union groups contend they do.
“It seems now that the drastic reductions in injured workers’ benefits are being trickled down to save employers’ costs,” said Angie Wei, a lobbyist for the California Labor Federation.
“But that was never the way the costs were supposed to be. They weren’t supposed to hurt the truly injured workers, and that’s what’s happening,” she said.
Passed by lawmakers in 2003-2004, the overhaul of California’s massive workers’ comp system has yielded some of the steepest cuts in employers’ insurance rates in years.
Between January 2004 and last month, workers’ comp insurance rates have been slashed by an average 26.8 percent, according to a report issued by the Department of Insurance.
That’s less than the 36.5 percent that Insurance Commissioner John Garamendi has urged, but it’s a major change in a system that employer groups said dramatically increased the cost of doing business in the state.
The rating bureau’s recommendations go to Garamendi, who is expected in November to announce his own – more formal – recommended rates for insurers in 2006.
“This is further evidence that the reforms have taken hold and are significantly reducing costs within the system,” Garamendi said in a statement Friday, in response to the rating bureau’s filing.
