CaMiz Member
Posts: 76
Joined: Sep 2004
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Friday February 11, 2005 8:59 PM
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There's an article at the East Bay Business Journal's 1/21/05 edition stating that WC premiums went down 17%. I am not familiar with this publication so it would be a very welcome piece of news if indeed this has merit. Here's the link for the 1/21/05 edition - http://eastbay.bizjournals.com/eastbay/stories/2005/01/24/story8.html
Interesting enough, there was an article at www.consumerwatchdog.org, which reprinted a 5/14/04 article from LA Times, about Garamendi's hopes on premium reduction. The article stated ... "Garamendi, though conceding that the bulk of the new bill's relief won't be felt until next year, said he was likely to recommend that insurers cut rates beginning this summer by at least 18%. The proposed reduction, he said, would reflect savings from this year's law and two other workers' comp bills passed by the Legislature in 2003." The news item also mentioned a Douglas Heller, director of the Foundation for Taxpayer and Consumer Rights, a Santa Monica activist group, who said "......premiums should drop by at least the 14% estimated by the rating bureau." Here's the link to that article FROM A YEAR AGO - http://www.consumerwatchdog.org/insurance/nw/nw004269.php3
It seems to me that the reductions are almost on track with the reform intent (it is off 1% from what Garamendi hoped)..... but it is a wonderful start.
The statement that workplace homicides jumped in 2003 doesn't seem to have any significance in all this anti-SB899 rhetoric, as SB899 didn't get approved until 2004..... you think people started killing people at work because they don't want p.t. to be limited to 24 visits? I'm not sure THAT's worth any jailtime for murder.
And by the way, Gilbert.... I'm not turning around. I've known you to be fair in the mutual cases I used to adjust where you were the applicant attorney .... and that was before I joined the forum. Reading your posts only reinforces that belief. Thanks for being around.
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EXCLUSIVE REPORTS
From the January 21, 2005 print edition
Workers' comp premiums drop by 17 percent
Chris Rauber
California's workers' compensation costs are finally coming down significantly, although not far or fast enough to satisfy many business owners.
Average annual premium rates from some of the state's top workers' comp insurers have declined by nearly 17 percent since January 2004, according to figures from the California Department of Insurance. And some clients are seeing cumulative declines of 24 percent or more.
At the State Compensation Insurance Fund, the quasi-public behemoth that insures about 53 percent of the state's comp market, rates have fallen by an average of nearly 15 percent since early last year.
While cautioning that State Fund "can't project or announce future rate filings," State Fund spokesman Jim Zelinski said, "We do believe the last two reform packages have the potential to realize really substantial cost savings. When those savings materialize, that will be reflected in future rates."
Without providing details, Zelinski said the state government is also starting to see rate reductions for its own employees as a result of the reforms passed by the state Legislature under former Gov. Gray Davis in late 2003 and under Gov. Arnold Schwarzenegger last spring.
Meanwhile, cumulative rate cuts since January 2004 from leading comp insurers such as Zurich American Insurance and Republic Indemnity Co. of California exceeded 24 percent, and those at Liberty Mutual Fire Insurance topped out at an even 20 percent.
Employers Direct Insurance, which entered the market two years ago, has matched Insurance Commissioner John Garamendi's rate-reduction recommendations, said CEO Jim Little, filing for reductions totaling 24 percent over the last 12 months.
Douglas Helm, Employers Direct's vice president of corporate marketing and Northern California sales, said insurers "are competing harder for business in the Bay Area than anywhere else in California."
But the reductions are taking place on a broad canvas.
"Not only are employers' costs going down, but we've turned the tide on medical inflation and for the first time in a decade insurers are not losing money and running in the red," said Nicole Mahrt, a spokeswoman for the American Insurance Association's Sacramento-based western division. "That's going to bring more insurers back into the (California) market."
Indeed, several new entrants have joined the comp fray in California in the past year, and others have expanded their presence in the market, notably units of Warren Buffett's Berkshire Hathaway Inc.
Norman Williams, a spokesman for the Department of Insurance, confirmed that reductions of nearly 17 percent are along the lines of what the DOI and other sources are reporting. Those sources include the Workers Compensation Insurance Rating Bureau, an industry-backed nonprofit that collects data on rates.
Not everyone is satisfied by the recent declines, especially since a beleaguered comp system forced thousands of businesses to swallow huge increases from 2000 through 2003.
Small Business California, a San Francisco-based group representing small businesses, is demanding that insurers quickly align their rates to reflect their improved financial and actuarial results over the last year or so.
Scott Hauge, a San Francisco-based insurance broker and small-business activist who helped create the group, said the WCIRB study proves that insurers "could be passing on even greater savings to small businesses."
In addition, since rates were adjusted upward every six months by hard-pressed carriers in the lean years between 2000 and 2004, "now they should be adjusted down every six months," in the interest of fairness.
Employers Direct's Little said his company's reductions have probably plateaued for the year, barring major unexpected changes, but that other insurers are likely to reduce rates.
"A 24 percent rate reduction in 12 months is pretty dramatic," he said. "(But) other companies may not have been able to go to that level (yet), so we may see rates tend to trend down to the levels recommended by Garamendi by mid-year."
In addition, if the comp market stays stable, "unlike the tortuous volatility over the last eight years, we'll see more capital coming in and we'll see more competitors, which will drive prices down more."
Rauber is a reporter for the San Francisco Business Times, an affiliated publication.
ᄅ 2005 American City Business Journals Inc. ----
Edited: Friday February 11, 2005 at 9:05 PM by CaMiz
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