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Insurance commissioner Poizner makes no mid-year workers’ comp rate recommendation

NORTH BAY, May 9, 2008 – California Insurance Commissioner Steve Poizner announced today that he would not release a mid-year workers’ comp advisory rate for the first time in six years, saying the market has finally stabilized.

“I am pleased that stability in the workers’ compensation insurance marketplace has eliminated the immediate need for a pure premium rate advisory,” he said.

As workers’ comp reform caused rapidly declining insurance rates, state advisory groups made regular practice of releasing a proposed rate at each possible interim period, though it was not mandatory. But during the last six months, the dramatic drops have slowed, and the system appears to be returning to a more consistent cycle.

The Workers’ Compensation Insurance Rating Bureau uses a calculation of reported losses and premiums to devise a pure premium rate recommendation that can either be accepted or denied by the commissioner, though they are meant only as a benchmark for insurers to set their rates against.

This month would have been the time for the next interim advisory rate, but the bureau did not release a recommendation, and the commissioner called no advisory rate hearing. The move follows a recommendation for no rate change during the last advisory rate period, January 2008.

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