Earlier this month, the California Department of Insurance ordered that every insurer licensed to write workers’ compensation insurance in the state is required to report their yearly tax savings due to the tax Jobs and Cuts Act of 2017, beginning in 2018. The Act — effective this year — reduces the corporate tax rate from 35% to 21%, allowing insurers to retain a larger proportion of policyholder premiums for profit.
According to the order, insurers must also provide a detailed calculation showing the percentage to which these savings impact their rates; or, if there is no impact, to provide an explanation why. California Insurance Commissioner Dave Jones claims that the reported findings will allow the Department to provide transparency regarding workers’ compensation savings to businesses and to the public.