Commissioner orders workers’ comp insurers to report federal income tax savings
News: 2018 Press Release
SACRAMENTO, Calif. — Insurance Commissioner Dave Jones announced today he has issued an order that every insurer licensed to write workers' compensation insurance in the State of California must report their federal income tax savings annually through a rate filing in light of the new tax law.
The recent revision to the Federal Tax Schedule for 2018 reduced the corporate tax rate from 35 percent to 21 percent. That means that nationally insurers will now be able to retain even more of policyholder premiums as profit.
"Any savings to insurers should be passed along to California businesses," said Commissioner Jones. "This order will allow my department to examine workers' compensation insurers' savings and rates and provide transparency to the public. I urge insurers to pass these savings along to policyholders."
Jones' order will require each insurer to submit a rate filing to report the dollar amount of their tax savings by December 31, 2018, and on a yearly basis through December 31, 2020. Insurers will need to provide details about how those savings impact their rates. The insurer must also provide a detailed explanation if they have determined that there is no rate impact, stating why the reduction in the federal corporate tax rate does not affect their rates.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.