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The State Compensation Insurance Fund is seeking to cut its workers’ compensation rates, per a recent filing with the California Department of Insurance.

The rate filing also includes an overall 9.5 percent rate reduction due to improvements in State Fund’s claims costs and goes into effect next year.

“An important part of State Fund’s purpose is to provide fair pricing. We have filed a new pricing structure with the California Department of Insurance (CDI) that will further enhance our pricing accuracy and rate stability for our policyholders,” said Gina Simons, communications director for State Fund.

State Fund said in a communication sent out to insurance brokers that it is evolving its pricing structure by introducing additional pricing ranges and risk characteristics “that will further enhance pricing accuracy and make our rates more stable year over year.”

Although the rate action will have an overall effect of a decrease, individual policyholders may see their rates increase or decrease depending on their individual loss experience, Simons said.

“Once the filing is accepted by CDI, we anticipate it to be effective Sept. 1, 2016,” Simons added.

Last week the SCIF also released its 2015 Annual Report which is now available online. The report profiles financial performance in 2015 highlighted by an increase of $271 million in net income, which is 14 percent more than in 2014. Other important highlights include – 138,000 policies were written in 2015 – net premiums earned were $1.6 billion – policyholders’ surplus grew by $164 million since Dec. 31, 2014, and net investment income was $731 million.

“2015 was a pivotal year for State Fund’s transformation into the agile and efficient workers’ compensation carrier we will become,” stated Vernon Steiner, State Fund President and CEO. “Under the oversight of our Board of Directors, we began this transformation with the goals of strengthening our culture and improving our business processes and technology.”

Despite this favorable financial achievement, State Fund’s Board of Directors did not declare a dividend on new or renewal policies that incepted during the 2015 calendar year. Instead, during 2015, State Fund designated an additional $750 million dollars as restricted surplus to cover future expenses for pension and other healthcare benefits. It also continues to carry reserves for losses, anticipated future claims, and expenses that are prudent and adequate for our operations.

This proposed rate reduction is atypical good news for the California workers’ compensation marketplace. California employers generally tolerate unrelenting premium increases. At least for now, other states are facing the bad news.

For example, Florida businesses could soon be paying almost 20 percent more for workers’ compensation coverage. In response to a recent decision from the Florida Supreme Court, the National Council on Compensation Insurance (NCCI) filed a 17.1 percent rate increase with the Florida Office of Insurance Regulation (OIR) for all new, renewal and additional policies in effect on a “pro-rata” basis. It’s the first rate filing from NCCI, which files on behalf of 260 Florida workers’ comp insurers, since the Florida Supreme Court struck a devastating blow to the state’s workers’ compensation system.