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.
Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.