California Anticipates Reducing Workers Compensation Rates For Employers

Insurance Commissioner John Garamendi today announced he will likely recommend a further reduction in workers’ compensation insurance rates of at least an additional 6.3%. Based on pre-reform trends, the Workers’ Compensation Insurance Rating Bureau (WCIRB) estimates that such a reduction would result in cumulative savings to the system of $10 billion to $14 billion since 2003.

The Commissioner made the announcement while standing with the owners of the San Francisco Soup Company, where he launched the early stages of the reform effort three and a half years ago. According to the WCIRB, the Commissioner’s approval of a 6.3% drop in the pure premium rate will result in an overall reduction of 58% in the rate since 2003.

“The success of these reforms is unprecedented,” said Commissioner Garamendi. “The reforms laid out in my Roadmap, along with further reforms signed by Governor Schwarzenegger, have cut costs by more than half. No other state has enacted reforms that reduced workers’ compensation costs to this degree.”

The significant reductions were spurred by the Commissioner’s “Roadmap to Reform,” which yielded legislation that cut system costs substantially. Successful reforms were first signed into law by Governor Davis, and were followed by additional legislation signed into law by Governor Schwarzenegger. Read more at insurance.ca.gov