State Compensation Insurance Fund on Tuesday announced it filed a July 1, 2008 revision to its rating plan, which it anticipates will result in a 3.5% reduction in collectible premium.While base rates will remain unchanged, State Fund has expanded its merit rating and claims-free discount plans to lower rates for policies with superior safety records. The new rate filing will affect new and renewal workers’ compensation policies with an effective date on or after July 1, 2008.
As State Fund expands its “claims-free” credit, some small employers with superior safety records will see their claims-free discount increase from 10% to 13% or 15%. Additionally, for the first time new business accounts to State Fund may also qualify for a claims-free credit based on experience with their prior carrier. "Promoting safe workplaces is a vital part of State Fund’s mission and small business is the backbone of California’s economy. We feel it is critical to pass on savings that recognize employers for maintaining safe workplaces," said State Fund President and CEO Janet Frank.
In addition State Fund is enlarging the range of accounts that qualify for its expanded merit rating plan allowing its underwriters greater discretion in pricing accounts generating more than $100,000 in premium. State Fund’s underwriters will be able to base more of the pricing decision on each individual account’s experience, providing the opportunity for deeper discounts on accounts with excellent safety records.
“Since 2003 State Fund’s rates have fallen steadily and this latest filing brings our cumulative decrease to 57% percent below pre-2004 reform levels” Frank added. "We have seen significant decreases in cost that are directly attributable to the 2004 passage of SB 899, the Governor's reform legislation, as well as AB 227 and SB 228 in 2003. State Fund has been committed to passing those savings back to employers in the form of lower rates to help California’s economy continue to grow," Frank said.
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