For Immediate Release
Contact: Greg Hayes
September 21, 1994
TORRES JOINS GARAMENDI IN ANNOUNCING HISTORIC 16% WORKERS' COMPENSATION RATE REDUCTION
*Huge Decrease Called Tremendous Boon for California Business*
LOS ANGELES -- California business hit hard by recession and years of high workers compensation premiums, stands to gain a great deal following an announcement today by Insurance Commissioner Garamendi and Senator Art Torres (D-Los Angeles) of a 16% reduction in the minimum rate charged for workers compensation insurance, which will help keep businesses from leaving the state and translate into thousands of new jobs for Californians.
The rate decrease represents the deepest reduction in the minimum rate in California history and was achieved through increased fraud prosecution and the implementation of tougher laws. "Businesses have suffered long enough from inflated workers compensation premiums," said Torres. "Commissioner Garamendi is to be commended for his efforts in fighting fraud, which costs 25 cents of every insurance premium dollar paid, to
help gain this savings for California businesses."
Torres used the opportunity to urge Governor Wilson to take two important additional steps in lowering workers' compensation rates by signing his SB 1833 and SB 1871. "By signing these two bills, the Governor will be able to attack fraud and give businesses a greater say in setting comp rates," Torres said. SB 1833 establishes civil penalties for fraud, and allows for fines collected to be given to district attorneys to beef up their fraud
divisions. SB 1871 allows for more business representatives to be added to the Workers Compensation Rating Board to give them a greater say in rate decisions.
The rate decrease represents the third straight time Garamendi has ordered workers compensation rates be lowered, and could result in as much as $800 million in insurance savings to California employers. "The savings from this rate decrease will stop many employers from leaving California and will allow many others to hire more employees with the increased savings," said Torres.
Karen Keiko White, President of Summit Installation Company, was also present at the press conference and stated that she considered moving her company out of California because of the high workers' compensation costs. Thanks to help from the Department of Insurance she was able to secure a reduction in her workers' compensation surcharge and remained in the state.
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