Legislative Overhaul is in the Works
Gov. Jerry Brown, Business Associations, & Labor Unions are hammering out a deal
Insurance companies that provide workers compensation insurance in the state of California have had a rough time of it lately, and have paid out more in claims than they have collected in premium. In response, Workers Comp rates have risen sharply over the last year, and in recent months insurance agents and their clients have seen renewal rates increase by 20-30% in some cases. Many insurance companies are reviewing and re-underwriting their existing policies to weed out the clients that they think are more likely to have losses, based on either each client’s individual loss experience, or based on the industry or type of business.
In response to the rising costs, Dan Walters of the Sacramento Bee reports that legislative leaders are attempting to pass legislation that will reduce payments to workers comp attorneys and to the medical clinics and doctors that treat injured workers.
This legislation will take time before it is enacted, and even more time before it begins to have an effect on rates. And of course much could change during the political process and in the Insurance Commissioner’s implementation of the still-unpassed laws.
This week, the Workers’ Compensation Insurance Rating Bureau confirmed that insurers, who compete fiercely for business, continue to pay out much more in claims and expenses than they receive from employers, even though premiums have risen 22 percent in the last three years, and more increases are in the pipeline.It’s all part of a familiar drill after the Legislature makes major systemic changes. It takes several years for new rules to be drafted and take effect and for real-world impacts – which are often different from those assumed in the legislation – to reveal themselves.
Read more here: http://www.sacbee.com/2012/12/14/5053709/dan-walters-workers-comp-overhaul.html#storylink=cpy