Since partial deregulation of insurance rates in 1995, the California workers' compensation insurance market has been very volatile. For reasons that go beyond price deregulation, there have
been dramatic swings in insurers' underwriting profits and the share of coverage written by private insurance carriers, and a substantial number of insurers, including some of the largest
market participants, have failed. The price that California employers have paid for workers' compensation insurance has been volatile since 1995 as well, continuing the considerable variation
that occurred in earlier years. This book identifies and examines factors that contributed to the market volatility and the large number of insolvencies following price deregulation. It also
examines the regulatory system that oversees the workers' compensation market and how the California Department of Insurance responded to the market turmoil that followed the move to open
rating. It makes recommendations that aim to reduce market volatilityand the frequency of insolvencies while realizing the benefits of a competitive market.
