California Insurance Commissioner Ricardo Lara adopted and issued lower rates for workers’ compensation insurance benchmark rate by 5 cents to $1.41 per $100 of payroll effective Sept. 1.
Lara’s decision results in an average advisory pure premium rate that is below the $1.50 average rate recommended by the Workers’ Compensation Insurance Rating Bureau of California in its filing with the California Department of Insurance. Lara issued the advisory rate after a public hearing that he convened on June 7, and a review of the testimony and evidence submitted by stakeholders.
The recommended rate reduction is based on insurance companies’ cost data. The pure premium rate is only advisory. The newly approved average advisory pure premium rate level of $1.41 approved by the commissioner is about 24.2% lower than the industry-filed average pure premium rate of $1.86 as of Jan. 1.
This marks the 11th consecutive reduction to the average advisory pure premium rate benchmark since January 2015.
Lara issued emergency rules in June 2020 allowing businesses to reduce costs for workers whose duties changed to lower-risk classifications or were furloughed due to the pandemic. The rules will expire this summer following the end of the statewide stay at home order on June 11.
“Reducing workers’ compensation rates will continue to assist our state’s recovery as many businesses reopen and rehire,” Lara said in a statement. “I believe protecting our essential businesses and their workers from increased costs was the right thing to do last year. With the vaccine rollout, public health measures, and emergency rules that I approved since the start of this pandemic in order to reduce costs for businesses, it is still the right thing to do today. Insurance companies must continue to be cautious and be guided by data as we recover from this hopefully once-in-a-lifetime pandemic.”
Was this article valuable?
Here are more articles you may enjoy.