WCIRB – lowers Work Comp Rate Increase Suggestion by .7%

FLASH: Bureau Lowers Rate RequestCiting revised data from Zurich, the Workers’ Compensation Insurance Rating Bureau has lowered its pure premium rate recommendation to a 23.7% increase, down from 24.4. The change came after a data call in which Zurich US Group submitted revised aggregate financial data that pushed the curve for the claims cost benchmark. The lower filing won’t help much to turn around what has become the democratic debacle that was once the Governor’s workers’ comp reform.

“In essence some of the data reported on the aggregate data call was put into the wrong bucket. It was reported as allocated loss expenses instead of losses,” explains Jack Hannan, spokesman for the Bureau. “It had a fairly small impact on the overall increase, but given the size of the increase we thought it made sense to amend the filing so the information was out there.”

The difference equates to $72.8 million statewide that employers won’t have to pay based on the $10.4 billion in gross written premiums recorded by carriers last year.

Along with reducing the size of the rate increase, the Bureau’s amended filing also adjusts the experience rating eligibility threshold to reflect the new recommendation. The threshold would now be set at $19,421 instead of $19,531 called for in the original filing. Currently the experience rating threshold is set at $15,700.

California Insurance Commissioner Steve Poizner is set to hold hearings next week into the filing and will release later this year a non-binding rate recommendation. From there it is up to carriers to decide if they want to follow the recommendation, raise rates as they see fit, or exit the market.

A copy of the revised filing can be found in our resources section by clicking here.

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