The state has given its approval for the largest rate reductions of any US state.
California workers compensation insurance rates have received their official approval, reducing them more than any other state in the third quarter.
All 10 of the most notable rate reductions within that quarter received state approval.
The announcement was initially made by an S&P Global Market Intelligence analysis. These California workers’ compensation rate cuts followed September 1’s reduction of the 1.41 percent pure premium benchmark issued by the state Department of Insurance.
The rate reduction that received approval for a subsidiary of The Travelers Cos. Inc. appears to be the coverage with the highest single rate action in the third quarter. The Travelers Property Casualty Co. of America’s 5.6 percent rate reduction will shrink the company’s calculated premium written by $24.0 million. It will affect almost 30,000 Californian policyholders.
A number of significant rate cuts in the state also received approval for subsidiaries of Great American Holding Inc. That group saw four rate reductions which will be reducing its estimated premiums by $9.3 million. Two of those rate cuts were on the list of the quarter’s most significant rate reductions.
On the whole, Illinois and California workers’ compensation insurance were tied for total rate reduction.
On the whole, the two states were tied as the busiest in the country with respect to the total number of rate reductions that received third quarter approval. The two states gave the nod to 48 rate reductions during that three-month span.
That said, the Californian actions appear to have brought about a substantially greater reduction in premiums. The total Californian rate cuts will be slashing premiums in the industry by an estimated $86.5 million. On the other hand, in Illinois, the reductions will bring about $23 million in premiums reductions.
Any third quarter rate increases will impact the California workers’ compensation insurance premiums far less than the reductions. There were 110 rate increase approvals in 34 states and the District of Columbia. They will lead to $8.6 million in premium increases, which is far less than the size of the total reductions.