Brokers caution fundamentals point to coming increases
NORTH BAY -- Workers' compensation rate increases by California insurance carriers have remained far below the 22.8 percent increase recommended by the Workers Compensation Insurance Rating Bureau for new and renewed policies.
“The seeming lack of carrier support for major rate hikes is due in part to state Insurance Commissioner Steve Poizner’s denial of an increase in the pure premium rate, citing the depressed economy as a rationale,” according to Tom Griffith, CIC, vice president with Don Ramatici Insurance Inc. “He also elected not to include avoidable costs in approving such increases to this benchmark – a ruling that ran counter to recommendations from his staff – because carriers were not implementing his 17-point guidelines for cost reduction.”
Commissioner Poizner previously rejected the bureau's request for an even higher 23.7 percent increase last July.
Despite these recommendations, a recent listing of 136 carrier filings, reported on Jan. 21 by "Workers' Comp Executive," showed that 21 carriers, 15 percent of the total, filed revised pure premium and rates that were lower than those previously reported (in a range of -0.2 percent to -13 percent), while 42 other carriers, 31 percent of those reporting, held the line with zero increases during the period.
Another 73 carriers increased rates from 0.2 percent to 16.5 percent, but these rate adjustments were still well under the bureau's proposed advisory level.