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Donna Eyman: Workers’ Comp Insurance Bureau Recommends Rate Hike

The 22.8 percent increase would affect policies written or renewed after Jan. 1, 2010

The Workers’ Compensation Insurance Rating Bureau of California, or WCIRB, has recommended a 22.8 percent increase for policies written or renewed after Jan. 1, 2010.

Donna Eyman
Donna Eyman

State Insurance Commissioner Steve Poizner opposes the proposed rate increase, saying that California employers simply can’t afford the increase given the weakness of the economy and the state’s high unemployment rate.

“This effectively would be a tax on every employer in the state of California to cover the cost of workers’ compensation insurance,” Poizner said. “As rates go up, it will definitely make our unemployment grow worse.”

California’s unemployment rate was 12.2 percent, according to September figures.

Workers’ compensation rates have fallen by more than half in the past six years. Poizner suggests that insurance carriers focus on improving the efficiency of their operations and cutting claims handling and medical costs rather than raising rates.

The WCIRB came up with its recommended increase after reviewing the costs of handling accident claims in the 12 months before June 30. It also focused on a potential effect of changes in statistical reporting and two cases pending before the Workers’ Compensation Appeals Board.

Poizner’s recommendation not to increase rates is not binding, but many insurance companies generally follow the commissioner’s lead.

— Donna Eyman represents Eyman Parker Insurance Brokers Inc. and James G. Parker Insurance Associates Inc.

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