In workers' compensation law news, the California Department of Insurance recently announced that the majority of work comp insurers doing business in the state are increasing their base or premium rates for the upcoming year.

Specifically, Insurance Commissioner Dave Jones announced that the top 100 work comp insurers -- accounting for 96.7 percent of the entire California market -- collectively increased their workers' compensation premium rates by an average of 2.8 percent for 2012.

Interestingly, this year marks the start of a new system in which the Department of Insurance establishes a recommended benchmark for premium rates that work comp insurers are either free to follow or deviate from.

Here, it appears that the majority of work comp insurers choose to adhere to this recommended benchmark.

"This past year we improved the pure premium benchmark process by establishing a benchmark based on what is happening in the market," said Jones in a released statement. "In November, I announced the approved advisory pure premium benchmark that would be effective in 2012. A significant number of insurers, representing a significant share of the overall market, are using the approved advisory pure premium rates."

It is worth noting that the largest work comp insurer in California, the State Compensation Insurance Fund -- which accounts for 15 percent of the entire market and provides insurance to those employers unable to secure it elsewhere -- will keep its rates relatively static for 2012.

Since the state legislature dramatically overhauled the state work comp system in 2003 and 2004, work comp premiums have remained relatively low. To illustrate, premium rates were $6.29 per $100 of payroll in 2003 versus $2.16 per $100 of payroll in 2008.

However, these premium rates have risen somewhat over the last few years -- reaching $2.37 per $100 of payroll in 2011 -- due to rising medical expenses.

Stay tuned for further updates in the area of workers' compensation law from our San Diego firm ...

If you have questions or would like to learn more about workers' compensation benefits, contact an experienced legal professional.

This post was for informational purposes only and is not to be construed as legal advice.

Sources:

The Los Angeles Times, "Employers paying a bit more in workers' compensation premiums" Jan. 17, 2012

California Department of Insurance Press Release, "Workers' compensation rate filings indicate that significant number of companies are using insurance commissioner's advisory pure premium rates" Jan. 17, 2012