Sacramento, CA – Commissioner Dave Jones made the right move recently by approving a mid-year increase in the Pure Premium Advisory Rate effective for policies renewing on or after July 1, 2012, said the Association of California Insurance Companies (ACIC). The Commissioner approved a rate of $2.49 per $100 of payroll. While slightly less than the rate recommended by the Workers’ Compensation Insurance Rating Bureau of $2.51 per $100 of payroll, the approved rate is 8.26 percent higher than the January, 2012 approved rate of $2.30 per $100 of payroll.
“In his decision, the Commissioner acknowledged that costs in the system are increasing and called the cost increases “steady and dramatic.” He also said that in spite of increased costs, the department is seeing “very little change in the average price that insurers are charging employers,” The Commissioner also noted that insurers have been able to hold costs in check by drawing down investments, however this is not sustainable in the long term,” said Mark Sektnan, ACIC president.
“The Commissioner made a responsible decision not to ignore the increasing systemic costs. Now each insurer will look at their book of business and decide the appropriate rate that balances the needs of a competitive marketplace and their individual claims expenses. We look forward to working with Commissioner Jones, legislators and Gov. Brown on any proposed reform package that will provide increases in permanent disability while offsetting any new costs with tangible cost savings. It is very important that policymakers continue looking at the cost drivers in California’s workers’ compensation system and identify ways to curtail these cost pressures.”