Sacramento, CA – California Insurance Commissioner Dave Jones recently held a hearing on setting the advisory pure premium rate for workers’ compensation insurance policies effective January 1, 2013. The advisory pure premium rate is required by law to adequately reflect the losses and loss adjustment expenses in the system. The Association of California Insurance Companies (ACIC) urged the commissioner to maintain the relevancy of the pure premium advisory rate process. The following statement can be attributed to ACIC President Mark Sektnan:
“The California Legislature and Governor Jerry Brown approved SB 863 during the final days of the 2012 session to enact cost saving reforms and increase permanent disability benefits for injured workers. The next step is to understand how and when these reforms will generate their anticipated savings. The Division of Workers’ Compensation is busy promulgating emergency regulations to implement several important reforms contained in SB 863. While some important regulations will be in effect on January 1, many others, including critical fee schedules for medical and other service providers, will not be finalized for several months or even years.
“It is very important that the Workers’ Compensation Insurance Rating Bureau’s recommended advisory pure premium rates submitted to the commissioner reflect what is actually happening in the system and, to the greatest extent possible, anticipate how as yet unimplemented reforms will affect actual costs in 2013.
“Commissioner Jones has done a great job administering the pure premium rate setting process consistent with his statutory mandate. ACIC urges this process to be maintained consistent with the well documented recommendations and analyses from actuarial, claims, and other system experts who advise the WCIRB in its role as the commissioner’s designated rating organization.”