California insurers lost billions on workers' comp last year

New ammunition emerged Tuesday for a behind-the-scenes political battle shaping up over California's multibillion-dollar system of compensating workers for job-related injuries and illnesses.

The Workers' Compensation Insurance Rating Bureau reported that the insurers who provide coverage for most employers collected $10.4 billion in premiums in 2011, but paid out $7.7 billion in support benefits and medical care, and had expenses of $5 billion and thus lost about $2.3 billion.

It fuels the nascent campaign of insurers to increase premiums and suggests that they may form an alliance with unions, medical providers and attorneys for injured workers to overhaul the workers' compensation reforms enacted eight years ago. That would create conflict with employers, who enjoyed sharp premium reductions after the reforms were enacted.

Historically, the contending factions have formed alliances and fought pitched battles in the Legislature about once a decade. Lobbyists are anticipating that a new outbreak of political hostilities is coalescing.

The new report said that losses on workers' compensation coverage were greater than those experienced in 2010.

Insurers, the report said, paid out $4.4 million for medical care of disabled workers and another $3 million in direct support benefits to workers. The report, however, does not include data from large private and public employers who typically self-insure for job injuries rather than purchase insurance.