WCIRB Makes Case for 8.5 Percent Increase in Workers’ Comp Rates

The Workers Compensation Insurance Rating Bureau of California has put on the table a plan for an 8.5 percent increase in pure premium for workers’ compensation rates in the state. The WCIRB submitted its plan July 31, with rates if approved to go into effect Jan. 1, 2002.

The proposed pure premium rates were based on the following factors: insurer losses received during last year and previous accident years valued as of March 31 of this year; insurer loss adjustment costs for 2000 and previous years; the experience rating off-balance correction factor; payroll and loss experience, by classification, which comes out of policies issued during 1998 and previous years.

Now in the hands of Insurance Commissioner Harry Low, the rate request will go to a public hearing Sept. 26 in San Francisco.

In a letter which accompanied the rate filing, Robert Mike, president of the WCIRB, noted his concern as it relates to the volatility of recent loss development patterns. In his letter, Mike advised Low that the WCIRB will be studying accident year experience valued as of June 30 of this year as soon as it is obtained and, if necessary, will amend the pure premium rates which are being proposed in the filing.

Legislation which could impact the cost of workers’ comp benefits is also being studied.

Changes to the Inpatient Hospital Fee Schedule were adopted recently and the WCIRB plans to study the effect on the cost of benefits of any legislation which is enacted, as well as the changes to the fee schedule. According to the WCIRB, if the study notes a major change in the cost of benefits, the WCIRB plans to amend its filing to show the change on both the proposed Jan. 1, 2002 pure premium rates and the Jan. 1, 2001 pure premium rates which are currently being used.

Topics Trends Workers' Compensation Pricing Trends