As expected, the Workers’ Compensation Insurance Rating Bureau of California has submitted a pure premium rate filing to the California Insurance Commissioner recommending among other things 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 as a tool for determining 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 perent proposed by the WCIRB since they were last adjusted January 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 approved pure premium rates in effect July 1, 2003, WCIRB said.
Gov. Arnold Schwarzenegger has gone on record opposing the rates, 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. Some of these changes are proposed to be effective Jan. 1, 2011 and others on Jan. 1, 2012.
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. Additionally, WCIRB 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 on the matters contained in the WCIRB’s filing will be held Sept. 28, 2010, at 1:00 PM in the 22nd Floor Hearing Room at 45 Fremont Street, in San Francisco.
The filing and related documents may be viewed or downloaded from the Regulatory Filings section of the WCIRB Web site.
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