San Francisco, CA – Today, the WCIRB submitted its January 1, 2013 Pure Premium Rate Filing to the California Department of Insurance (CDI) containing, among other things, advisory pure premium rates proposed to be effective January 1, 2013. The advisory pure premium rates proposed for the 493 standard classifications to be effective January 1, 2013 average $2.68 per $100 of payroll; this is 12.6% higher than the corresponding industry average filed pure premium rates of $2.38 as of July 1, 2012.
The indicated January 1, 2013 average advisory pure premium rate of $2.68 represents an approximate 10% deterioration in experience from the WCIRB’s July 1, 2012 indication. The deterioration is attributable to continued adverse loss development, elevated indemnity claim frequency, an increase in the projection of future loss inflation, an increase in allocated loss adjustment expense and lower wage growth forecasts. The Executive Summary of the Filing contains additional details concerning these cost drivers and their impact on losses and loss adjustment expenses.
The proposed January 1, 2013 advisory pure premium rates do not reflect any provision for the comprehensive workers’ compensation legislation that is currently under consideration by the California Legislature. To the extent legislation is enacted that significantly impacts the cost of losses and loss adjustment expenses on policies incepting in 2013, the WCIRB will evaluate the cost impact of the legislation and submit an amended set of proposed January 1, 2013 advisory pure premium rates by the time of the public hearing on this Filing. Similarly, the WCIRB will be reviewing accident year experience valued as of June 30, 2012 once it is received and, if appropriate, will amend the pure premium rates proposed in this Filing.
In addition to pure premium rates, the Filing includes proposed amendments to the California Workers’ Compensation Uniform Statistical Reporting Plan – 1995 (USRP), the Miscellaneous Regulations for the Recording and Reporting of Data – 1995 and the California Workers’ Compensation Experience Rating Plan – 1995. These proposed amendments are detailed in Part B of the Filing. All of these recommended changes are proposed effective January 1, 2013 with the exception of the revision to the physical audit requirement related to dual wage classifications found in the USRP. The change to the audit requirement is proposed to be effective on policies incepting on or after January 1, 2014 to allow insurers sufficient time to implement the change.
The CDI will hold a public hearing on the matters contained in the WCIRB’s Filing. It is expected that the CDI will announce the date of the hearing within the next week. Once the date, time and location of the hearing are set, the WCIRB will add that information to its website and issue a WCIRB Wire story.
The Filing and all related information may be viewed, printed and downloaded from the Regulatory Filings section of the WCIRB website.
Source: CA WCIRB