Workers' Compensation Insurance Companies Seek to Increase Rates by 24%
Statement by California Labor Federation Executive Secretary-Treasurer Art Pulaski
“Today’s request by workers’ compensation insurance companies to increase their rates by nearly 24% is simply unconscionable. Showing just how out of line this outrageous demand is, labor and management are standing together to ask the Insurance Commissioner to reject the request.
“Since the 2004 reforms workers compensation insurance companies have made record profits while injured workers have faced devastating cuts to benefits. Workers permanently disabled on the job have seen total dollars in the system slashed by more than 70%. One in three permanently disabled workers who would have been eligible for help under the old system now receives nothing at all. Overall, the number of injury claims has dropped dramatically over the past five years.
“With these draconian cuts to injured workers and the corresponding decline in the cost of providing coverage, a rate hike of this size is unwarranted and unacceptable. Workers’ compensation insurers have enjoyed record profits since the 2004 reforms, and this rate increase would just pad their big profits even more.
“The Insurance Commissioner should reject this rate hike. Unfortunately, even that decision won’t have the impact it should because the Commissioner only has an advisory role in setting rates. Insurers can – and will – continue to charge whatever they choose. To stop runaway workers’ compensation costs, the Insurance Commissioner should be given the power to set insurance rates to reflect the actual cost of taking care of injured workers.”