California Lowers Workers’ Comp Advisory Rate Again

November 7, 2018

California Insurance Commissioner Dave Jones on Wednesday issued a revised advisory workers’ compensation pure premium rate, lowering the benchmark to $1.63 per $100 of payroll effective Jan. 1, 2019.

Jones has reduced the advisory pure premium rate by about 42 percent since January 2015, when he approved an average pure premium rate that was $2.81 per $100 of payroll.

With an average filed pure premium rate of $2.13 per $100 of payroll as of July 1, 2018, insurers were on average applying pure premium rates that were roughly 19.7 percent more than the corresponding average advisory pure premium rate of $1.78 approved by the commissioner as of that date, according to the California Department of Insurance.

The indicated advisory pure premium rate level of $1.63 approved by Jones is about 23.5 percent lower than the industry filed average pure premium rate of $2.13 as of July 1, 2018, according to the CDI.

“Savings for workers’ compensation insurers continue and all of those savings ought to be shared with employers,” Jones said in a statement. “Cost savings in the workers’ compensation system have helped insurers and employers deserve to share in the cost savings through lower premiums. I renew my call on workers’ compensation insurers to pass along savings to employers.”

Jones’ decision results in an advisory pure premium rate that is below the $1.70 average rate recommended by the Workers’ Compensation Insurance Rating Bureau in its filing. Jones issued the advisory rate after a public hearing and review of the testimony and evidence submitted by stakeholders.


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