Like many employers, Sierra Group Chief Financial Officer Scott Martin was expecting his workers' compensation insurance premium to drop sharply this year.

The Glendale-based designer and builder of bank facilities had done a good job of avoiding claims. And Martin was counting on workers' comp reforms signed into law last year to bring his $250,000 a year premium down at least 20 percent.

But when Martin opened his premium renewal statement last month, it showed an increase. "The politicians claimed that the rates were going to go down 20 percent, 30 percent or more. But it's all smoke and mirrors," he said.

Frustrated, Martin took his policy renewal to his insurance broker and asked him to try to find a better quote. The broker came back a few days later with a reduction of $1,000 a month, or about 5 percent.

That's about typical for businesses throughout Los Angeles and the state. According to several local insurance brokers, the average rate reduction for their clients this year is between 5 percent and 10 percent. Figures from the state Department of Insurance show an average 7 percent decrease, according to department spokesman Norman Williams.

Only a few employers are seeing premium reductions near the 20 percent that politicians were predicting when Gov. Arnold Schwarzenegger signed a workers' compensation reform package last April following a four-year run when average rates more than doubled.

As of September 2004, California employers still paid workers' comp premiums that averaged $5.34 per $100 in payroll, about twice as high as the next most expensive state.

* The full version of this story is available in the Feb. 28 edition of the Los Angeles Business Journal.

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