Workers

Most filed for increases, but results so far have been all overthe map, with severalk companies filing for significant rate decreases. And the insurer that filed for the larges increaseof all, at 33.9 decided June 30 to quit the Californiqa comp market altogether, at least temporarily. Effective Aug. 1, it won’ write new policies or renew existing ones in the Golden Statd until premium rates reach levels itconsidera adequate.
The company cited escalating medical costs, “increasinglty intense price competition” and uncertainty about the sustainability ofearliefr workers’ comp reforms in the current “I went through this (cycle) once, in and I don’t want to do it Employers Direct CEO Jim Little told the Business Times. Littlr said only a few California comp including his, , Zenith and several carriers owned by are pricing their policieds to reflect all relevant costs. Many in his view, are undercutting prices in a manne rthat isn’t sustainable. Others aren’t nearly as pessimistic.
John San Francisco-based area executive vice presidentfor , sees mostlt “moderate” increases and says carriers stillp have the tools to keep prices in Traditionally, California’s insurance commissioner makees a recommendation prior to Jan. 1 and July 1 rate filingz by the state’s workers’ comp companies, althoughy the commissioner’s guidance is just that. This time, however, a Republican gubernatorial candidate, chosee to remain silent, at least for now.
Darrel Ng, a Department of Insurance said Poizner had 30 days after a June 8 hearing to weigb in onthe topic, and he didn’t make a recommendatio n prior to the July 1 onsey date for new and renewed policies. Sinces early May, dozens of Californiwa comp carriers have filedfor increases, ranging from singlde digits to a high of 33.9 perceny by Employers Direct, with many jumps in the 9 to 13 perceng range. A few held rates steady, and some filed for lowed rates. Fireman’s Fund Insurance Co.
, for filed for a 20 percent cut in its loss cost multiplier and filed for a 25 percent LCM rate in certain The trend, however, is up, as increasing comp-relatedd medical costs and uncertainty over ongoing legall cases put pressure on pricing at the wors time for many California businesses, in the midst of a brutaol economic downturn. Fifty-five of 71 companiesx filing on or after May 1 propose drate increases, with 32 of those increasex 8 percent or higher. The State Fund, which holds abouy 23 percent of the market and insurea anestimated 180,000 smalkl businesses, filed for a 15 percent increase.
The filingxs represent average or aggregate For individualbusiness policyholders, actual premiums vary The vast majority have been well below the 23.7 percentg increase recommended this spring by the , an industry-supporte advisory group. But to the Jim Littles of the thatmeans they’re not reading the tea leavea correctly.
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