The governing board of the Workers' Compensation Insurance Rating Bureau on Tuesday approved a recommendation for a 6.3% decrease in pure premium rates effective Jan. 1. California's costs, however, last measured at $3.75 per $100 of payroll by the WCIRB, still rank high compared to the rest of the nation.

The board approved a recommendation made last week by the bureau's Actuarial Committee. The bureau will likely submit the proposal to Insurance Commissioner John Garamendi in the next few days.

The Insurance Department has scheduled a Sept. 28, 2006 public hearing to hear the recommendation.

The pure premium rate recommendation is contingent on California Gov. Arnold Schwarzenegger's expected veto of Senate Bill 815, a bill by Senate President Don Perata, D-Oakland, that would double permanent disability benefits over three years. The Rating Bureau is recommending a 1.8% increase in the pure premium rate if Schwarzenegger signs the bill.

The proposed reduction would be the sixth in a row since rates peaked in 2003 and California lawmakers passed the first of two major workers' compensation reform measures.

Garamendi approved a 2.2% reduction effective Jan. 1, 2005; an 18% reduction effective July 1, 2005; a 15.3% reduction effective Jan. 1, 2006 and a 16.4% reduction effective July 1, 2006.

The recommendation applies to policies incepting or renewing after Jan. 1, 2007.

Most major insurers, however, have not cut as deeply as the commissioner's recommendations.

Interestingly, the State Compensation Insurance Fund, while not lowering its rates as much as some national insurers, has become one of the most competitive bidders for good quality risks of employers in recent weeks. Employers with good loss histories will often find very attractive quotes from SCIF, and broker’s commissions are increasing at the State Fund as well.