State Insurance Commissioner Dave Jones on Friday announced he has recommended a 10 percent cut in the workers’ comp premium rate that insurers charge employers, the first such recommended cut in four years.
The decrease, recommended for policies renewing after July 1, is in line with April recommendations from an insurance industry advisory group. But it is roughly double the size of cuts that insurers had previously announced they would be implementing.
Jones’ call for a mid-year workers’ compensation premium cut to an advisory rate of $2.46 for every $100 of payroll is unusual; typically, the insurance commissioner makes rate recommendations only once a year for policies renewing after Jan. 1.
But Jones cited insurance industry cost data showing that medical costs to treat workplace injuries have gone down substantially in recent months, warranting the mid-year adjustment. He said it appeared that state legislative reforms enacted in 2012 finally appear to be kicking in and helping drive down medical costs.
Under California law, workers’ compensation insurance premium rates are generally set by the market; the insurance commissioner can only make recommendations. But most insurers generally peg their rate changes accordingly. Employers in low-risk industries with good workplace safety records could see even lower rates.