Zenith National Insurance Corp. announced Tuesday it will lower workers' comp rates by an average of 4.4 percent, effective on or after Jan. 1. Zenith is California's largest private-sector insurer of the mandatory coverage for injured workers. Zenith has cut base rates by 39 percent since system reforms began in 2003. This is the Woodland Hills-based carrier's sixth consecutive rate decrease.

"Continued deflationary cost trends make rate reductions appropriate," Zenith chairman and president Stanley Zax said in a news release.

Zenith's announcement means the state's two largest workers' compensation insurers are lowering rates.

The State Compensation Insurance Fund earlier filed with state regulators for a 9 percent average decrease, effective on or after Jan. 1 for new and renewing policies.

State Fund, a semi-governmental agency, is the state's largest workers' comp provider. This is the San Francisco-based insurer's seventh consecutive rate decrease.

State Fund has been lowering rates since 2003. Its rates "now reflect a cumulative savings of 49 percent below pre-2004 rate levels," the company said in a news release.

Small employers -- those with annual premium of $1,000 to $75,000 -- with "superior safety records" will continue to receive a 10 percent workplace safety credit, State Fund said.

State Fund's market share is "now coming down to a more traditional level and its financial stability is assured," said Jeanne Cain, the insurer's board chairwoman.

In the late '90s and early this decade, State Fund dramatically grew its market share while private carriers folded or fled the state during a crisis in the industry. Between 2000 and 2002 alone the insurer grew its premium volume by 200 percent. State regulators pushed the insurer to slim down to protect its solvency. As the market has stabilized following reforms, employers have gained other coverage options, allowing State Fund to downsize.

Reporting by the Sacramento Business Journal, an affiliated publication, was used in this story.

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