Massive Work Comp Rate Hikes Coming

Thank the Worker’s Comp Appeals Board for allowing previously closed claims to be re-opened. The Irony is that the board is made up of Schwarzenegger appointees and Work Comp reform was the hallmark of his administration.

It could be gone now… this just arrived in my email box 15 minutes ago:

The Workers’ Compensation Insurance Rating Bureau’s actuarial committee met yesterday. It appears likely that the Governing committee will recommend a whopping 27% mid-term pure premium rate increase when it meets on Wednesday. Bureau’s staff is continuing to crunch some of the numbers, but that’s the recommendation from the actuarial committee to the Governing Committee.

This range of recommendation will send shockwaves through employers and shudders through politicians, among them California Insurance Commissioner (and potential gubernatorial candidate) Steve Poizner who last fall whittled down a 16% recommended increase to just 5%. This also ends Governor Arnold Schwarzenegger’s season of workers’ comp reform and sets up an ignoble end to one of the hallmarks of his administration.

It’s clearly unclear what the Department of insurance will do with this recommendation as it will likely include some data that has been excluded in the past, as well as costs that have not yet been incurred by carriers. This latter issue relates to the projected impact of recent en banc decisions by the Workers’ Compensation Appeals Board involving permanent disability awards, notably Almarez/Guzman and Ogilvie. Carriers are increasing reserves and bracing for closed cases petitioning to reopen and recalculate disabilities as a result of the WCAB decision.

Noting that these decisions are “eerily reminiscent” of the Minniear decision of the late 1990’s, … Continued Here