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11/23 - A Brief Summary of California Workers' Compensation News

Today's post will briefly examine workers' compensation defense news from around the state.

Proposed increase in work comp premiums rejected by Ins. Commissioner Poizner

This past summer, the Workers' Compensation Insurance Rating Bureau (WCIRB) recommended a 27.7 percent increase in workers' compensation premiums to Insurance Commissioner Steve Poizner.

In recent developments, Poizner has rejected this recommendation, opting instead to recommend that the amount paid by California employers to insurance companies for work comp premiums remain unchanged.

Poizner's justification for the rejection was that substantial increases in workers' compensation base rates would create additional costs for employers during already perilous economic times.

"Our nation and our state are in the midst of a recession and unemployment rates are sky high," said Poizner. "This is absolutely the wrong time for workers' compensation rates to increase."

Poizner - who will be leaving the post of Insurance Commissioner in January - also advised work comp insurers that they could likely lower their costs considerably through the implementation of several reforms previously approved by state legislators.

These reforms include: implementation of faster methods to approve treatment, quicker resolution of treatment disputes and more regular use of coordinated healthcare provider networks and.

"Once again, workers' compensation insurers have failed to demonstrate that they have adopted procedures to control costs or that they are operating efficiently," said Poizner. "Even in a better economy, I still wouldn't budge on rate increases without the industry first implementing the efficiencies we have recommended."

Commissioner Poizner also asserted that workers compensation insurers had posted profits for several years.

However, many of the major figures in the insurance industry indicated that this assertion was misguided and failed to account for current economic conditions.

"Pointing out profits is the wrong way to go," said vice president of the American Insurance Association Steve Suchil. "All workers' compensation payers and employers are facing similar cost pressures. The issue is underlying costs."

Suchil pointed out that last year, workers compensation insurers paid $1.24 for every $1 collected.

California's licensed workers' comp companies may accept or reject Poizner's recommendation and establish their own rates. (However, they typically use the Insurance Commissioner's recommendations as their primary benchmark.)

This post was provided for informational purposes only and is not to be construed as legal or medical advice.

Stay tuned for further developments in the area of workers' compensation defense law ...

Related Resources:

Proposed 28% Increase in Workers' Comp Rates Blasted (The Los Angeles Times)

Calif. Insurance Head Rejects Workers Comp Rate Hike Request (Business Insurance)

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