State's Largest Insurer Announces Average 5 Percent Rate Cut
By Associated Press - December 1, 2004SACRAMENTO (AP) _ California's largest workers' compensation insurer said Monday that its average rates will drop another 5 percent Jan. 1, but the insurance commissioner said the State Compensation Insurance Fund should be able to offer bigger decreases.
The announcement by State Fund, as the quasi-governmental agency is commonly called, means that its average rates have dropped more than 14 percent since the start of this year, said spokesman Jim Zelinski.
"To fulfill its legislative mandate and mission, State Fund must ensure it has the financial strength to meet its obligations to California employers and their injured workers for years to come," said the fund's president, Dianne Oki.
"This rate filing achieves that objective while providing additional rate relief to our policyholders. We will continue to make the delivery of benefits to injured workers as effective and efficient as possible."
Commissioner John Garamendi, who doesn't regulate State Fund rates, said the fund could cut its charges as much as 22 percent with "greater efficiencies and planning."
"State Fund, with 55 percent of the market, must be a leader," he said.
Garamendi's projection of the cost of injured workers' claims has dropped 22.6 percent since the middle of 2003, but average workers' comp insurance rates paid by employers have dipped only 10.4 percent-despite the series of reforms passed by lawmakers to reduce skyrocketing increases.
Zelinski said it was difficult to react to Garamendi's criticism "without hearing any specifics."
"We can assure California businesses we are operating efficiently and we do understand they deserve further rate relief," he said. "We assume that will happen when additional savings from the reforms materialize."
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