Once again, California's Insurance Commissioner has rejected the 27.7% recommended rate increase by the California's Workers Compensation Rating Bureau (WCIRB). I had thought the requested rate increase was somewhat steep. However, a 0% rate increase may not be the answer either.

The Workers Comp insurance carriers can increase or decrease any of their rates as they see fit using their own underwriting data. I have rarely seen where the Insurance Commissioner or Rating Bureau had ever rejected the rates set by the insurance carrier.

Is the Workers Compensation insurance rating system for California or any state harmed when the Rating Bureau's recommended rates are rejected? That is a tough question to ask. If the recommended rate increases by the rating bureau are not that sharp, then I do not see it as a problem. California's WCIRB has recommend 20% rate increases often over the last few years and have been rejected.

I think the carriers have amassed a large amount of underwriting data. Therefore, they know the correct rates to charge for Workers Compensation coverage to their insureds. As the rates are usually "rubber stamped" by the Rating Bureau and Insurance Commissioner, let the market reflect the Workers Compensation environment, not vice versa.