State Fund Files an 8.9 Percent Premium Increase for 2009
The principal driver of the rate increase is medical inflation. Over thepast two years workers' compensation medical costs have been rising at a rateof about 12% per year, according the most recent report published byCalifornia's Workers Compensation Insurance Rating Bureau. "This inflationdid not affect rates while claims frequency was falling at double digit rates,but it appears that frequency declines have dropped off to about 2% per year,"said Jan Frank, State Fund CEO and President.
"These are uncertain times for the economy, which makes rate settingchallenging. We felt it was important to take a conservative approach topricing," Jan Frank continued, "While rate increases are difficult, it isimportant to remember that State Fund premium levels have fallen significantlysince 2003, and even after this increase, will still be 52% below pre-reformlevels."
State Fund's rate filing will apply to new and renewal workers'compensation policies with an effective date on or after January 1, 2009.
Editor's Note: State Fund has approximately 200,000 policyholders rangingfrom small businesses to large group associations. Created by the CaliforniaLegislature in 1914, State Fund is a nonprofit, self-supporting, fairlycompetitive public enterprise that guarantees a permanent workers'compensation insurance marketplace at cost for California employers. StateFund has acted as both a moderating and stabilizing influence on the workers'compensation market. For more information, please visit http://www.scif.com.
SOURCE State Compensation Insurance Fund
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