Posted on 08/08/2005 5:57:16 PM PDT by NormsRevenge
SACRAMENTO (AP) - Workers' compensation insurance rates paid by California employers have dropped an average of about 26 percent since lawmakers instituted a series of cost-cutting bills beginning in 2003, but bigger reductions are possible, Insurance Commissioner John Garamendi said Monday.
"The full effect of reforms have not yet been realized to employers," he said in a conference call with reporters. "Further reductions are possible and should happen."
Garamendi estimates that the claims insurers have paid for work-related injuries has dropped 36.5 percent since mid-2003, but insurance companies have reported overall base-rate reductions of about 26.8 percent in the same period.
Actual price cuts by the 25 largest workers' comp insurers operating in California have averaged only 25.7 percent, according to projections made by Department of Insurance actuaries.
Those reductions range from 41.22 percent by the Swiss RE Group to 10.77 percent by State Farm Fire and Casualty Co, the department said.
Garamendi said there were several reasons for the variations, including how high a company's prices were in 2003, each company's financial condition and their marketing strategies.
He said the industry's price cuts seem to be lagging about six months behind his advisory rates.
"The bottom line is there is more relief possible for employers...," he said. "We should in the months ahead see better and lower prices for businesses in the state of California."
Sam Sorich, president of the Association of California Insurance Companies, said insurers are still uncertain about how some regulations putting the new cost-cutting laws into practice will work and whether courts will overturn key provisions of the legislation.
"But despite these uncertainties, the reforms are progressing and results for California businesses are expected to improve with time as the final pieces of the reforms are implemented," he said in a statement.
Lawmakers passed a series of changes in workers' compensation in 2003 and 2004 to respond to skyrocketing claims that boosted the cost of workers' compensation insurance as much as 200 percent to 300 percent in some instances.
The changes included limits on the amounts doctors, pharmacies and clinics can charge to treat workers' comp patients, development of new treatment guidelines and regulations that critics say will result in sharp cutbacks in benefits for many disabled workers.
Some lawmakers and consumer advocates say the legislation has resulted in exorbitant insurance company profits, while some employers say their insurance bills have stayed stagnant or even increased.
But a Senate bill to regulate workers' comp rates is bottled up in an Assembly committee.
Garamendi said it was appropriate for lawmakers to wait for more analysis before deciding if rate regulation is needed.
My single-line expertise was only in personal-lines auto. My understanding was that Anything RE was a re-insurer.
Basically they insure insurers. Then you have those that re-insure re-insurers. They have those too and more.
Whatever. My insurance industry interest died five years ago (or more). But just pointing out that comparing Joes P&C (F&C) with Joes RE is B&S, IMO.
Something like that - Ha.
Oh Garamendi is probably the biggest fool around, IMO. Thats all.
Apparenlty actual workers compensation premiums in my neck of the woods are not going down by anywhere near 25%. Is Garamendi playing with "weasel" words? If so, why?
Just so theres no confusion about that Garamendi is THE commissioner in charge of the DOI that approves EACH/EVERY rate change. It doesnt matter if its a change in payment plans, a change in base rates, or a change in factors or underwriting criteria his department has his STAMP OF APPROVAL on EVERY rate change that is eventually implemented up, down, or sideways.
Hes played dumb before. The goo-goos in the general public eat it up, historically. That's all.
his department puts
An audit can do that.
Garamadate is a putz! You can take that to the bank!!!
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