In announcing the move, Garamendi strongly renewed his call for insurers to pass along the savings more quickly to employers. He noted while he had previously called for cumulative decreases of 36.5 percent, insurance companies had lowered rates by only 26.7 percent.
"This does not compute," he stated. "Insurance companies are currently paying just 38.5 cents of every premium dollar they collect for the care of injured workers. It's obvious that the savings are there - insurers simply need to pass them on."
Garamendi reiterated that the major reforms brought about by AB 227 and SB 228 are working. Those pieces of legislation helped halt what he called an "up-escalator" of rising workers' compensation costs that were choking businesses and the state's economy.
"The turnaround provided by this legislation is significant and great news for our state's economic health," he continued. "Insurers should recognize that the additional savings now available could be the fuel that injects even more life into our recovering economy."
During his announcement, the Commissioner noted that many of the reforms are still being implemented, as well as additional reforms brought about by SB 899. He cautioned that as they are more fully implemented, some changes may result that slow the pace of future decreases in the pure premium rate.
The Commissioner also expressed concern about testimony he has received regarding the savings resulting from changes to the workers' compensation permanent disability rating schedule.
"The decrease in permanent disability ratings from the pre-2005 rating schedule to the new schedule are almost half," he said. "I urge the Legislature and the Governor to quickly reexamine this issue and have corrective action taken if necessary."