California’s insurance regulator has called for workers’ compensation insurance companies to reduce their premiums.
The regulation, effective July 01, 2020, requires insurers to decrease the premiums paid by employers in the state. It is retroactive to California’s March 19 stay-at-home order and expires 60 days after the order is lifted, northern California deputy insurance commissioner Michael Soller told Reuters.
Soller added that the new regulation will reduce both the premium owed for previous months and the future. The regulation affects 50 insurers, including Travelers, Berkshire Hathaway, AIG, Chubb, Fairfax Financial Holdings, Everest Re, Employers Holdings, James River Group, Old Republic International, W.R. Berkley, and Zurich Insurance.
Officials cited lower risk factors – as millions of employees work from home due to the pandemic – as the primary reason for the new regulation.
“Workers’ compensation premiums should reflect that many employees are performing less risky duties,” California insurance commissioner Ricardo Lara said in a statement.
The National Association of Insurance Commissioners noted that no other states have implemented similar regulation.