California insurers are supporting Insurance Commissioner DaveJones's decision to recommend a 6.7 percent increase in workers'compensation rates for next year.
|California's huge workers' comp system has been in flux for anumber of years, and the state's combined ratio hit 140 in2010.
|While Jones' recommended pure premium rate of $2.70 per $100 ofemployer payroll is lower than the $2.75 recommended by the StateWorkers Compensation Insurance Rating Bureau, officials of theAssociation of California Insurance Companies (ACIC) point out thatJones' recommendation recognizes costs in the system.
|The officials note the current combined ratio in the state is120, and it is still not clear whether reforms imposed through a2012 law will have the desired effect of lowering costs. Theofficials called the 2012 reforms a work in progress.
|“Commissioner Jones made the right move when he recognized theongoing cost increases in the state's workers' compensationsystem,” says Mark Sektnan, ACIC president.
|Sektnan says Jones is “taking a responsible position” and isbeing mindful of the importance of managing solvency and theability to cover costs.
|He says initial data on the 2012 reforms is available and “thereis both good and disconcerting news.”
|Basically, Sektnan explains, “It is a waiting game to find outif the cost savings will occur or if unexpected developments willcurb projected savings from being realized.”
|Jones' recommendation is advisory. According to Sektnan,insurers will take this recommendation and apply it to their bookof business and determine the most appropriate rates necessary tocover costs and compete in the marketplace.
|Want to continue reading?
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