State Fund Files 8.9% Rate Increase
State Compensation Insurance Fund (SCIF) has filed for an 8.9% workers’ compensation rate increase. The rate filing discounts the advice of the actuaries at the California Department of Insurance and at the Workers’ Compensation Insurance Rating Bureau, which
recommended increases of 9.4% and 16% respectively. The rate increase is almost double the 5% increase Insurance Commissioner Steve Poizner suggested in an advisory October 24th.
The increase comes at a bad time for most California employers, especially those involved in industries such as construction, manufacturing, trucking, retail, and service industries who are already hurting from the struggling economy and under the threat of new taxes in California.
The higher rates go into effect for policies incepting and renewing January 1, 2009. Fortunately for most within CDTOA SCIF Group 919, our renewal date was October 1st, so we missed this one until we renew in October of 2009. And with a group loss ratio under 1%, your loss history has probably improved reflecting lower ex-mod’s. Lets all hope work improves by than.
SCIF says premiums for individual employers will be based on the experience of their particular rating class and experience modification. Some classes could see even higher rates. State Fund cites the major driver of the increase as medical inflation. It says that over the last two years medical costs have been rising at a rate of 12% per year, according to the Workers’ Compensation Insurance Rating Bureau.
State Fund noted that its premiums and market share have dropped precipitously since 2003. With employers struggling to keep workers’ comp costs down and preserve jobs, increased employer costs like these will make it much harder on those industries already hard hit.