Skip to Main Content
Menu
Contact Us Search
CA Department of Insurance
CA Department of Insurance
CA Department of Insurance

Insurance Commissioner Lara issues workers’ compensation benchmark rate

News: 2022 Press Release

For Release: July 15, 2022
Media Calls Only: 916-492-3566
Email Inquiries: cdipress@insurance.ca.gov
Insurance Commissioner Lara issues workers’ compensation benchmark rate
Action supports California’s recovering economy while acknowledging challenges still facing businesses

SACRAMENTO, Calif. — Today, Insurance Commissioner Ricardo Lara adopted and issued a rate for workers’ compensation insurance that reflects California’s still-recovering economy. Recognizing that businesses are working hard to return to a nearly pre-pandemic market but still facing economic uncertainty and continued COVID-19 disruptions, the Commissioner’s action maintains the benchmark rate at $1.45 per $100 of payroll for workers’ compensation insurance unchanged from last year and within the reasonable actuarial range proposed by other experts, effective September 1, 2022.

Because of continued uncertainty regarding COVID-19 and its effects on the economy, this year’s pure premium rate remains the same as last year’s rate, and again does not include a COVID-19 factor. Commissioner Lara will continue to review data in future pure premium rate filings to determine the long-term impact of COVID-19 claims as well as other experience data.

“We’re working hard to get California back to business as usual as people return to work,” said Commissioner Lara. “This year’s rate is on par with normal, pre-pandemic levels while still reflecting the long-term benefits of workers’ compensation reform passed by the State Legislature and signed by the Governor to reduce costs.”

Commissioner Lara’s decision results in an average advisory pure premium rate that is below the $1.56 average rate proposed by the Workers’ Compensation Insurance Rating Bureau of California (WCIRB) in its filing with the Department of Insurance. Commissioner Lara issued today’s advisory rate after a virtual public hearing that he convened on June 14, 2022 and careful review of the testimony and evidence submitted by stakeholders.

The recommended rate is based on insurance companies’ cost data. The pure premium rate is only advisory, as the State Legislature has not given the Commissioner rate setting authority over workers’ compensation rates. The average advisory pure premium rate level of $1.45 approved by the Commissioner is about 18 percent lower than the industry-filed average pure premium rate of $1.77 as of January 1, 2022.

Commissioner 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. Late last month, Commissioner Lara issued an Order directing the WCIRB to continue implementing the rule he adopted in 2020 which excludes COVID-19 claims from being used in calculating experience modification rates from December 1, 2019 forward.

# # #

Media notes:

  • Decision and Order of Insurance Commissioner Ricardo Lara implementing workers’ compensation claims cost benchmark and advisory pure premium rates.

 



Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.

Google Translate