As expected, the Workers’ Compensation Insurance Rating Bureau of California has submitted a pure premium rate filing to the California Insurance Commissioner recommending a 29.6 percent increase in pure premium rates or “claims cost benchmark” effective Jan. 1, 2011.
Pure premium rates are a benchmark that insurers may use to determine their own rates.
The proposed increase is based upon the WCIRB’s analysis of accident year experience valued as of March 31, 2010, and reflects the loss and loss adjustment expenses expected to occur on policies with effective dates on or after Jan. 1, 2011. This is the third increase in pure premium rates in excess of 20 percent proposed by the WCIRB since they were last adjusted Jan. 1, 2009.
If the full 29.6 percent increase is approved by the Insurance Commissioner, the Jan. 1, 2011, pure premium rates will still be, on average, 53 percent lower than the rates in effect July 1, 2003, WCIRB said.
Gov. Arnold Schwarzenegger opposes the rate increase, saying it would be burdensome for California employers.
Also contained in the filing are a number of proposed changes to the California Workers’ Compensation Uniform Statistical Report Plan – 1995 and the California Workers’ Compensation Experience Rating Plan – 1995.
The WCIRB said it will review accident year experience valued as of June 30, 2010, once it is received and, if appropriate, will amend the pure premium rates proposed in its filing. Similarly, if legislative or regulatory changes are adopted or judicial action is taken prior to the time of the scheduled California Department of Insurance (CDI) public hearing on this filing, the WCIRB will evaluate the estimated cost impact of these changes and, to the extent appropriate, modify the pure premium rates proposed in this filing.
WCIRB said its staff is gathering further information regarding the proposed changes to the standard classifications for (a) engineers, (b) land surveyors, (c) oil or gas geologists or scouts, and (d) geophysical exploration, and if appropriate, the WCIRB will amend the Jan. 1, 2011, pure premium rate filing.
A public hearing will be held Sept. 28, 2010, in San Francisco.
Topics California Trends Workers' Compensation Pricing Trends
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