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News about California Worker’s Comp Reform

News about California Worker’s Comp Reform

Insurance companies have a history of problems with the State of California and it seems to be happening again.  During a period between the 1990s and early 2000s, many workers compensation carriers either left the California market or stopped writing insurance in the state.  Then in 2003, former governor Arnold Schwarzenegger helped create reforms which stopped the exodus of workers comp insurers from California.

During that period of 1997 to 2006, the California Department of Insurance was compelled to take over and liquidate 31 carriers.   The State-ran Compensation Insurance Fund had to pick up the slack, writing compensation checks for more than 50 percent of the total market.

Now, it is Governor Jerry Brown’s turn to end the uncertainty surrounding workers compensation carriers.  Many carriers have been operating at increasing loss ratios since the reform in 2003 and wonder if the new laws will make a difference.  Often the savings which are hoped for in new laws end up being watered down from lawsuits and regulatory changes.

Some carriers are optimistic that the changes will be effective.  California’s largest workers comp carrier, the State Compensation Insurance Fund announced a 7 percent decrease in their rates in October of 2013. Most other insurance rates are staying the same or even being raised.  If you are looking for worker’s compensation insurance for your business, it is a good opportunity to shop for new rates.  Contact a knowledgeable insurance agent at Wise Insurance Agency in San Rafael to review the needs of your business.

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