Insurance Commissioner Dave Jones Announces Pure Premium Rate Filing By WCIRB
News: 2012 Press Release
Insurance Commissioner Dave Jones announced today that the Workers' Compensation Insurance Rating Bureau (WCIRB) has presented an initial recommendation for a 12.6 percent increase in the industry-average pure premium rates. (Workers' Compensation Claims Cost Benchmark).
The WCIRB has notified the Commissioner that it will amend its filing to address any changes to costs that may result if and when currently proposed workers' compensation reform legislation is enacted.
The WCIRB is the rating organization that advises workers' compensation insurance companies writing in California about loss trends.
"My intention is to schedule a hearing as required by law within the next 60-days to evaluate the Claims Cost Benchmark recommendation of the WCIRB including any changes that occur due to workers' compensation reform," Commissioner Jones said. "Based on this latest filing, it appears that the costs of benefits and expenses continue to increase, putting pressure on the system."
The Claims Cost Benchmark is the average estimated combined cost of workers' compensation claims benefits and the expenses to adjust those claims. It is intended to apply to insurance policies that will be issued during 2013. The Commissioner does not set workers' compensation insurance rates, and his decision regarding the Benchmark is advisory. California workers' compensation insurers are free to set their own rates.
On May 29, 2012, the Commissioner issued an advisory Claims Cost Benchmark Decision following review and public hearing of the WCIRB's advisory filing. At that time the Commissioner advised that the Benchmark should be $2.49 per $100 of payroll.
The pure premium rates filed by insurers as of July 1, 2012, however, averaged $2.38 per $100 of payroll. The WCIRB is now recommending an average pure premium rate level of $2.68 per $100 of payroll.
The Claims Cost benchmark is not predictive of an individual employer's insurance premium. Actual premiums may differ greatly from these figures based upon an employer's business, the mix of employees and operations, and the employer's actual claims experience. To determine an individual employer's premium from either these figures or the Commissioner's determination on pure premium rates is not possible since these are measurements of the costs for the entire California workers' compensation insurance system.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $259 billion in premiums annually in California. In 2015 the California Department of Insurance received more than 155,000 calls from consumers and helped recover over $84 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.