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California Workers Comp Insurance Premiums Skyrocket
By Brendan McKenna
insure.com
Less than two months after California Gov. Gray Davis signed off on a
three-year $2.4 billion increase in benefits to workers injured on the
job, the Workers Compensation Insurance Rating Bureau (WCIRB) is calling
for another double-digit premium hike.
The WCIRB is requesting a 10.1 percent increase in workers compensation
insurance premiums on top of the 10.2 percent increase approved as of
Jan. 1, 2002. The current proposal will take effect July 1, 2002, if approved
by state insurance regulators.
Because workers comp claims have come in faster than insurers can make
up the costs in premiums or investments in the six months since the data
were last reviewed, "pure premium rates are already more than 10
percent inadequate," says the WCIRB.
The "pure premiums rates" recommended by the WCIRB are not mandatory,
functioning only as advice to insurers, but the California Department
of Insurance (CDI) has warned that if premiums fall too far below the
pure premium rates, some workers comp insurers may go bankrupt.
The bureau also says that this increase does not reflect the costs of
increasing workers comp benefits as required by the recently enacted Assembly
Bill 749. The impact of Assembly Bill 749 on workers compensation premiums
will be reflected in the WCIRB's filing scheduled to take effect Jan.
1, 2003, says the WCIRB.
If approved by the CDI, regulators will have recommended a 30.4 percent
increase in workers compensation premium rates since the turn of the century.
The insurance department plans to hold a hearing on the proposed premium
increase in mid-May 2002.
last updated:
April 10, 2002
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Diversified Risk Insurance Brokers
phone: 510/547-3203 fax: 510/547-5648
5900 Christie Ave
License # 0529776
Emeryville, California 94608
copyright © 2001
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