California WCIRB Proposes Premium 7.8% Below 2015 Average

The Workers’ Compensation Insurance Rating Bureau has submitted its Jan. 1, 2016, pure premium rate filing to the California Department of Insurance proposing advisory pure premium rates that average $2.45 per $100 of payroll.

That WCIRB figure is 7.8 percent less than the corresponding industry average filed pure premium rate of $2.66 as of July 1, 2015, and 0.8 percent less than the average approved July 1, 2015 advisory pure premium rate of $2.47.

The proposed further reduction in the advisory pure premium rate level for Jan. 1, 2016, follows a 10.2 percent reduction approved by the California Insurance Commissioner effective July 1, 2015. The primary drivers of the reduction include:

• Medical losses continue to develop favorably;
• Recent severity growth continues to emerge below projections;
• Increases in projected wage growth in California due to economic expansion.

However, the filing cautioned that historically high levels of loss adjustment expenses, persistently high rates of indemnity claim frequency, an increasing number of independent medical review requests, a spike in lien filings in early 2015 and persistent increases in temporary disability duration require continued monitoring as they may drive increased costs in the future.

The Department of Insurance will schedule a public hearing to consider the filing.

Topics California