Increasingly, employers are setting up shop in Texas, fleeing places like Gavin Newsom’s California.

We can think of one contributing factor to this trend.

Earlier this year, the Texas Department of Insurance (TDI) announced that it accepted the National Council on Compensation Insurance (NCCI)’s proposal to decrease average loss cost levels by 11.5%. As data on Texas employers’ premiums roll in, this news will likely translate to lower rates for workers’ comp coverage.

Texas joins the vast majority of US states in easing the burden of comp coverage for employers.

Meanwhile, California’s Insurance Commissioner, Ricardo Lara, increased employers’ comp rates based on problematic reporting by the Workers’ Compensation Insurance Rating Bureau (WCIRB). Mr. Lara is currently under investigation for blowing taxpayer funds on travel, luxury amenities, and a night partying with DJ Kitty Glitter, whose expertise in the insurance industry remains unsubstantiated.

daisyNews will continue to highlight workers’ comp rate decreases across the nation, as California employers continue to pay more and more for a system that is teetering under the leadership of the California Division of Workers’ Compensation and Governor Newsom.

TX: Dropping Rates in Line With National Trend

The TDI accepted the NCCI “advisory loss cost filing” with its recommended 11.5% decrease effective July 1, 2025. Advisory loss costs are a key component of employers’ rates for workers’ comp coverage, with a significant decrease likely to lower premiums.

As the NCCI noted in its summary of the proposed decrease (emphases ours):

“The workers compensation system continues to be healthy. While consumer inflation has been elevated, the inflation for workers compensation medical costs remained stable…

…The combination of continued frequency declines and moderate benefit costs at or below the level of wage growth, have continued to put downward pressure on overall WC system costs relative to collected premiums.”

In other words, workers’ comp is incredibly profitable for insurers right now, and the cost of actual medical treatment has not risen substantially.

Naturally, the result has been a decrease in premium rates in Texas and almost everywhere else. Almost.

CA: WCIRB Keeps Its Foot on the Gas

By the rest of the United States’ arithmetic, record insurer profits + stable medical costs = an opportunity to lower premiums (and in some cases, pay providers more).

Not so in California, where the WCIRB and its insurer members control the narrative. As directed by the WCIRB, Commissioner Lara hiked employers’ rates this year by 8.7%.

Why raise premiums, when insurers are raking it in? There’s no significant medical inflation to speak of, and California’s fee schedules for provider reimbursement are already among the lowest in the nation.

If insurers claim to be hard-up for cash in California, it’s a problem of their own making:

• Through the Medical Provider Network (MPN) system, insurers control which providers injured workers may seek care from.
• Through the Utilization Review (UR) system, insurers control what treatment injured workers receive.
• Through Preferred Provider Organizations (PPOs), insurers undermine the (already low) fee schedule and drastically reduce what they pay for workers’ medical treatment.

As the WCIRB insists that insurers need more money from employers, credible reports, such as the one below, show extremely healthy loss ratios for California insurers, indicating profitability in line with national trends (including the State Compensation Insurance Fund, the non-profit insurer of last resort).

So, why would the WCIRB (successfully) insist on higher rates? Could it have something to do with the fact that insurers dominate its Governing and Actuarial Committees?

With the state Insurance Commissioner in potential legal trouble, major city officials under fire for blatant corruption, a former high-level staffer charged with her own crimes, and a workers’ comp system in general disarray, the Newsom administration may have hard questions to answer.

Among them: With almost every other state asking less of employers as comp insurers make bank, why are California employers being asked for more?

Workers’ comp billing is different. Talk to daisyBill about making it easier and less costly to treat injured workers.

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