According to the Workers’ Comp Executive, this may take place January 1, 2016.
In May of this year, I shared with you that California Insurance Commissioner Jones recommended a 10.6% rate decrease to be effective July 2016. Since that time, the rating bureau that collects and analyzes workers’ comp data, has made a new recommendation to reduce rates further by an average of 2% for January 1, 2016.
The Workers’ Compensation Insurance Rating Bureau, aka the bureau, has concluded that claims are dropping as employer payrolls increase. Some of these decreases are “offset by continued increases in the cost of administrating claims in California.” Even though Commission Jones has yet to make a statement, many feel he will follow the bureau’s recommendation.
Since California is a rate competitive State, meaning that each workers’ comp insurance company may set their own rates, it remains to be seen how each carrier will react.
Rate recommendations by the bureau or by the Insurance Commissions are just that. Insurance companies can determine for themselves whether to follow, modify or disregard these comments.
Even now, it is still too soon to determine how insurance companies will react to the July 1st rate reduction. In our insurance practice, we find insurance companies still being very selective and attempting to avoid employers who have a history of claims either through declinations or by offering very high rates. We also find no constant evidence that rates have decreased for those employers who have maintained a stellar claims record.
So, let’s be optimistic and not to spend the potential “savings” until each of us sees it in our premium billings.
On a separate topic:
The Sacramento Employer Advisory Council (SEAC), in partnership with EDD, will be holding a Sacramento workshop August 19, 2015. This program is for those employers who wish to learn the best ways to respond to employee complaints and to avoid potential legal entanglements that can result. To learn more about this informative and entertaining event, please go to this SEAC website link to gain more information: SEAC Workshop – When an Employee Complains