California – Insurance Commissioner Dave Jones announced today that the California Department of Insurance has received and reviewed workers’ compensation insurance rate filings from insurance companies in response to the Commissioner’s advisory pure premium benchmark determination. The advisory workers’ compensation pure premium benchmark is an estimate of the costs for workers’ compensation claims benefits and expenses approved by the Commissioner that insurance companies may use in their rate filing. The Insurance Commissioner does not set workers’ compensation insurance rates.
“This past year we improved the pure premium benchmark process by establishing a benchmark based on what is happening in the market,” Commissioner Jones said. “In November, I announced the approved advisory pure premium benchmark that would be effective in 2012. A significant number of insurers, representing a significant share of the overall market, are using the approved advisory pure premium rates.”
According to CDI records, for the top 100 companies that make up 96.7 percent of the California workers’ compensation insurance market, a majority of companies are using the Commissioner’s approved advisory pure premium rates in their rate filings to be effective in 2012. The actual overall change in pure premium rates based upon all rate filings received from insurers resulted in a combined increase of only 2.8 percent for all companies.
The Commissioner evaluates the costs in the workers’ compensation system and issues an advisory pure premium rate. While insurers may use this as a benchmark, they are not required to follow the recommendation.
Source: CA DOI