California decides not to increase workers' compensation rate premiums

California's insurance commissioner rejected a proposal from an insurance industry group to increase the cost benchmark for workers' compensation rate premiums. The Workers' Compensation Insurance Rating Bureau (WCIRB) had requested a 23.7 percent increase in the Workers' Compensation Claims Cost Benchmark.

While the California Department of Insurance does not set workers' compensation insurance rates, an increase in the cost benchmark usually leads to workers compensation insurance premium increases.

California's Insurance Commissioner Steve Poizner said while refusing the increase, "Because of the faltering economy, record unemployment levels, and objections to the proposed increase from employers, I have focused on whether insurers and other parties in the workers' [compensation] system are exhausting every available avenue to control costs before granting any increase to the [benchmark]."

In a statement, California Governor Arnold Schwarzenegger applauded Insurance Commissioner Poizner’s decision to reject the WCIRB request for a premium rate increase.

The WCIRB had first requested a 24.4 percent increase in the benchmark in March and then revised it to 23.7 percent in April.

Governor Schwarzenegger wrote to the Insurance Commissioner in March urging him to reject the WCIRB request.

In October 2008, Commissioner Poizner rejected WCIRB's request for a 16 percent increase in the benchmark and instead granted a 5 percent increase.