California Insurance Commissioner Ricardo Lara has adopted and issued a revised average advisory pure premium rate, lowering the benchmark to $1.52 per $100 of payroll for workers’ compensation insurance, effective Jan. 1, 2020.
This is the ninth consecutive reduction to the average advisory pure premium rate benchmark since January 2015.
With an average filed pure premium rate of $1.99 per $100 of payroll as of July 1, 2019, insurers were applying pure premium rates that were roughly 19.2% more than the corresponding average advisory pure premium rate of $1.67 approved by the Commissioner as of Jan. 1, 2019, according to the California Department of Insurance.
The indicated average advisory pure premium rate level of $1.52 approved by the commissioner is about 23.6% lower than the industry filed average pure premium rate of $1.99 as of July 1, 2019.
Lara’s decision results in an advisory pure premium rate that is below the $1.58 average rate recommended by the Workers’ Compensation Insurance Rating Bureau in its filing.
Lara issued the advisory rate after a public hearing on Oct. 14, and a review of testimony and evidence.
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