California Insurance Commissioner Dave Jones should be commended for his decisive and expeditious approval of the workers’ compensation pure premium rate and for his leadership to create a transparent process that has resulted in a recommendation that better reflects what is actually being charged in the market, says the Association of California Insurance Companies (ACIC).
“We applaud the Commissioner’s efforts to lay out an improved, transparent process that is more accurate, timely and more in touch with how the marketplace is operating,” said Mark Sektnan, ACIC president. “We also appreciate the Commissioner’s recognition that system costs are rising, particularly medical costs. The Commissioner’s support for critical legislation that reformed the prescription of compound drugs is an important step towards controlling escalating medical costs. We look forward to working with the Commissioner and legislators during the 2012 legislative session to reform the lien process and help highlight the benefits of medical cost containment efforts, specifically utilization review.”
On Friday, Commissioner Jones approved the advisory rate filing recommended by the Workers’ Compensation Insurance Rating Bureau and the Department of Insurance. The claims cost benchmark has been set at $2.30 per $100 of payroll. Prior to the passage of historic reforms in 2003 and 2004, at the height of the workers’ compensation crisis, employers were paying $6.44 per $100 of payroll.
“Insurers will compare this advisory benchmark to their individual book of business and costs and decide the appropriate rates to charge for January 2012 renewals,” said Sektnan. “Despite rising costs, California’s employers continue to benefit from a competitive workers’ compensation market.”
The Association of California Insurance Companies (ACIC) is an affiliate of the Property Casualty Insurers Association of America (PCI) and represents more than 300 property/casualty insurance companies doing business in California. ACIC member companies write 41.8 percent of the property/casualty insurance in California, including 57.3 percent of personal auto insurance, 45.7 percent of commercial automobile insurance, 40 percent of homeowners insurance, 32.5 percent of business insurance and 43.4 percent of the private workers compensation insurance. PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association.