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  • WCIRB SUBMITS FILING RECOMMENDING A 29.6% INCREASE IN PURE PREMIUM RATES EFFECTIVE JANUARY 1, 2011

    San Francisco, CA August 18, 2010 – Today, the WCIRB submitted a pure premium rate filing to the California Insurance Commissioner recommending among other things a 29.6% increase in pure premium rates or “claims cost benchmark” effective January 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 January 1, 2011. This is the third increase in pure premium rates in excess of 20% proposed by the WCIRB since they were last adjusted January 1, 2009. If the full 29.6% increase is approved by the Insurance Commissioner, the January 1, 2011 pure premium rates will still be, on average, 53% lower than the approved pure premium rates in effect July 1, 2003. The proposed pure premium rates and the WCIRB’s analysis are contained in Part A of the WCIRB filing.

    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 January 1, 2011 and others on January 1, 2012. For information concerning these proposed changes, see Part B of the WCIRB filing.

    The WCIRB 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 this 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 January 1, 2011 pure premium rate filing.

    A public hearing on the matters contained in the WCIRB’s filing will be held September 28, 2010, at 1:00 PM in the 22nd Floor Hearing Room at 45 Fremont Street, in San Francisco, California.

    The filing and related documents may be viewed or downloaded from the Regulatory Filings section of the WCIRB website.

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