A letter warning of expected steep increases in workers compensation insurance premiums was sent to Insurance Commissioner Steve Poizner by California Gov. Arnold Schwarzenegger, reversing one of his landmark legislative achievements. The governor said an influential advisory group called the Workers Compensation Insurance Rating Bureau will back a 30% jump in recommended rates.
The bureau, run by the insurance industry, is slated to issue its rate recommendation August 11 and recommend the 30% increase, according to bureau spokesman Jack Hannan. (WCxKit)
According to Hannan, costs escalated in recent years, justifying the higher premiums. But Schwarzenegger stated medical claims increased "only slightly" while other expenses dropped.
Poizner plans to issue his own recommendation urging a much smaller rate increase, if any at a later date. Insurance companies, free to set premiums as they see fit, typically select a number somewhere between the two recommendations. (WCxKit)
In his letter to Poizner, Schwarzenegger said, "We must protect the 2004 workers compensation reforms, which reduced rates by 65 percent and have saved employers more than $50 billion." The new rates would go into effect January 1, 2011.
Author Rebecca Shafer, President, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact: [email protected] or 860-553-6604.
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
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