Good news for California employers: State Insurance Commissioner Dave Jones has recommended a 10.5 percent cut in the workers’ compensation premium rate that insurers charge employers.
The decrease in the rate benchmark to $2.30 per $100 of payroll is recommended for policies renewing after July 1.
It’s about 5 percent less than what Jones recommended six months ago for policies renewing at the start of this year.
“This is good news for California’s business economy,” Jones said on Tuesday. “A reduction in the pure premium rate should benefit employers if insurers lower their pricing.
Jones credited the recommended rate decrease to a sharp drop in workers’ compensation medical costs as reforms enacted in 2012 continue to be implemented.
However, rising attorney and claims adjustment costs served to keep the scope of the recommended decrease in check.
Under California law, workers’ compensation insurance premium rates are generally set by the market and the insurance commissioner can only make recommendations. Employers in low-risk industries with good workplace safety records could see even lower rates, while those in higher-risk industries or with numerous claims on their record will likely not enjoy the cuts.
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