California’s Workers’ Compensation-Completing the Reform DWC 13 th Annual Educational Conference: L.A. March 1 & 2, Oakland March 6 & 7, 2006

Aggregate Rate Change Data for the CA Workers’ Compensation Industry (Cumulative Post Reform Rate Changes as of 1/1/06) CDI Commissioner Approved cumulative Pure Premium Rate Reductions-46.24% State Compensation Insurance Fund cumulative Filed Rate Reductions-38.03% CA Workers’ Comp. Industry cumulative Filed Rate Reductions-37.70% CA Workers’ Comp. Industry Actual Net Rate Reductions reported by WCIRB as of 9/30/ %

Filed Rate Changes for Top 10 Groups for 1/1/06 Renewals (Cumulative Post Reform Rate Filings as of 1/1/06) COMPANY/GROUP MARKET SHARE CUMULATIVE RATE CHANGE State Fund51%-38.03% AIG Group6.8%-32.83% Farmers/Zurich5%-43.51% Zenith4.6%-32.32% St.Paul/Travelers 3.7%-41.08% Everest National3%-36.36% Grt.Am/Republic2.1%-50.14% Virginia Surety2%-29.80% Liberty Mutual1.9%-43.17% Clarendon 1.8%-36.46%

Newly Authorized Workers’ Compensation Insurers since AB 227, SB 228, SB 899 Determined by initial Rate Filing or Certificate of Authority Applications, as of 2/27/06 ) COMPANY / GROUP NAMEDATE OF ADMISSION 1. Norguard Group2/2/04 2. Employers Reinsurance Corp.7/28/04 3. National Liability & Fire Insurance Co9/24/04 4. Compwest Insurance Company10/4/04 5. Farmers Reinsurance Company11/16/04 6. California Insurance Company12/23/04 7. Berkley Regional Insurance Company1/13/05 8. TNUS Insurance Company1/14/05 9. Partner Reinsurance Company2/15/ SUA Insurance Company5/9/ Western United Insurance Company7/29/ Insurance Corporation of Hannover8/30/ Midwest Employers Casualty Company12/30/ Endurance Reinsurance Corp. of America1/6/ Great Divide Insurance Company2/16/06

Pending Applications for New Workers’ Compensation Insurers since passage of AB 227, SB 228, SB 899 Determined by initial Rate Filing or Certificate of Authority Applications, as of 2/27/06 ) COMPANY NAME DATE OF APPLICATION 1. Cornerstone Compensation Insurance Company3/2/05 2. Advantage Workers’ Compensation Insurance Company3/9/05 3. Lincoln General Insurance Company6/13/05 4. Financial Pacific Insurance Company10/20/05 5. Nova Casualty Company2/24/06 6. Memic Indemnity Company2/27/06

Average Rate Per $100 of Payroll Source: WCIRB & CDI Filings California Dept. of Insurance As of 1/1/06

California Workers’ Comp. Direct Written Premium Calendar Year California Dept of Insurance As of 9/30/05 Source: WCIRB

California Workers’ Comp. Estimated Ultimate Losses Accident Year California Dept. of Insurance As of 12/31/03 Source: NAIC

California Workers’ Compensation Loss Ratios California Dept. of Insurance As of 9/30/05 Source: WCIRB

California Workers’ Comp. Average Loss Severity Estimated Ultimate Loss Per Claim Includes impact of AB 227, SB 228, SB 899. Source: WCIRB California Dept. of Insurance

California Workers’ Compensation Claim Frequency California Dept. of Insurance Source: WCIRB

California Seasonally Adjusted Civilian Employment Source: Employment Development Dept. California Department of Insurance As Of 1/24/06

California Workers’ Compensation Accident Year Combined Ratio under Open-Rating Source: WCIRB California Department of Insurance As of 12/31/03

Comparison Shop on the internet – - Click on “Consumers”, “Compare Premiums”, “Information on the CA workers compensation rate comparison”, & click on the range of class codes that contains your governing class code. For example if your class code is 8810, click on codes , then click on the blue “Class Code Search” link. In the search PDF field, type in 8810 and click on the “search” button. Once the search is complete, click on the “Hide” button to enlarge the rate pages. Click on the Back button and go back to the Cal WC Rate Comparison main page, and click on “Check your insurance company’s profile” link to obtain the phone number of the company. Ask the company for a quote, or for an authorized broker that may provide a quote. If the quote is too high, select another company from the list. Check company licenses and broker licenses. Check financial stability ratings. –Many companies have their own websites and can provide on-line quotes.