Poizner Says NO! To Rate Increase Today

Citing decreasing workers’ comp costs from self insured’s’ and many opportunities for California workers ‘ comp carriers to implement cost containment measures, California Insurance Commissioner Steve Poizner today announced that he is just saying no to increasing the pure premium rates. That’s right: A ZERO INCREASE IN THE PURE PREMIUM RATE.

Self insured’s, Commissioner Poizner says, “have not waited around for regs from the DIR” to find creative solutions to decrease expenses. One example he cites is pharmacy networks, which Safeway has implemented including retailers outside of their own stores: They [Safeway] have also zeroed in on providing a preferred medical network where there is good communication with the employer so that the focus can be on proper care for injured workers and returning them to work.

The Department, he says, has identified 27 specific cost containment potentialities. Those include increased focus on workplace safety and a renewed focus on fraud.

Poizner is appointing a Commission made up of all industry segments to study and make recommendations on the implementation of the Department’s 27 points.

While there is evidence of costs going up in the system, he says they are in the single digits. With unemployment in California hovering in the 11%-12% range, Poizner says, he made a policy decision to not burden California employers with higher costs – effectively another tax – until cost containment measures have been taken. Poizner essentially told the industry that it needs to quit functioning as a pass through mechanism and become part of the solution.

While he did reject the Bureau’s inclusion of the expected costs from the Almaraz/Guzman and Oligvie cases, he indicated that he is open to increase rates for unavoidable costs to the system which come from legislative or judicial decisions, and indicated that there is big difference between avoidable system costs and unavoidable system costs.