Overall, the study projected the average approved insurance rate for 2006 to be $2.59 per $100 of payroll, roughly 46 percent lower than the rate of $4.81 per $100 of payroll in the second half of 2003. Additionally, the report found the rates for 2006 are actually below what was being charged for workers' comp coverage ten years earlier.

Absent the reforms, and assuming that costs continued to increase by 10 percent annually, the report estimated claims costs for policies that began in 2006 would have been $15 billion greater than is currently expected.

Without the reforms, but with claims costs steady at 2003 levels, the report said the projected claims costs for 2006 would be $8.1 billion higher than current projections.

Additionally, the study found the State Compensation Insurance Fund, the state insurer of last resort, has seen its market share shrink from 58 percent of the market in 2003 to only 41 percent last year.

Private insurers have begun to undercut the SCIF's rates, with rates averaging 15.2 percent lower, according to the report. In 2001, private workers' comp insurers charged an average of 2.1 percent more than the state fund.

The state market is still not as competitive as it could be, the report noted, as the SCIF maintains a commanding position in the market and there are fewer companies than in most states.

With competition increasing, however, the report cautioned against allowing a cutthroat level of competition to arise.

The report recommended that California monitor pricing to ensure it remains reasonable, analyze changes in market share, monitor the competitiveness and effectiveness of medical provider networks, and stay abreast of workers' comp-related developments in other states that could be applied to California.