In workers' compensation law news, the Workers' Compensation Insurance Rating Bureau (WCIRB) -- the organization that advises California's insurance commissioner on work comp base rates -- has reportedly been given the green light to recommend a somewhat sizeable rate increase.
Specifically, it is believed that WCIRB will recommend a 12.6 percent increase in the workers' compensation rates that insurance companies charge employers across the state of California.
The WCIRB's Actuarial Committee recently reviewed the relevant documentation and came away with the opinion that an increase of 12.6 percent -- pushing the average pure premium rate from $2.38 per $100 of payroll to $2.68 per $100 of payroll -- was merited.
Their recommendation was then submitted to the WCIRB's Governing Committee where the body voted unanimously to authorize WCIRB to submit the 12 percent increase for 2013 in its upcoming filing with the California Department of Insurance.
Interestingly, the rate hike did not cause too much of a stir among the work comp community.
"It wasn't a surprise," said Jerry Azevedo, a spokesperson for the Workers' Compensation Action Network. "Everyone knows that insurance carriers and the self-insured community are both getting hammered with higher costs and have been for several years."
What did cause a major surprise, however, was WCIRB's announcement that its recommendation could potentially be altered by the work comp reform package we discussed in the previous post.
"[The recommendation] is subject to revision pending a review of workers' compensation reform proposals under consideration in Sacramento and a review of June 30, 2012 loss experience once it becomes available," read the announcement.
Some are theorizing that if the reform package, which is supposed to reduce work comp costs, is ultimately adopted, it could get WCIRB to lower its projected pure premium rate increase.
"They are just now going to start taking a look at the reform package," said Azevedo. "Based on what I've heard in some briefs, this package would not necessarily take this from a rate increase proposal to a rate decrease proposal, but it might go toward controlling the cost a bit."
It is important to note that the Insurance Commissioner is free to either accept or reject WCIRB's recommendation. Similarly, California's 400 licensed workers' comp companies are also free to accept or reject WCIRB's recommendations and establish their own rates. However, they typically use the Insurance Commissioner's recommendations as their primary benchmark.
Stay tuned for updates on this important workers' compensation law story from our San Diego firm ...
If you have questions or would like to learn more about work comp benefits, contact an experienced legal professional.
This post was for informational purposes only and is not to be construed as legal advice.
Source:
Insurance Journal, "Workers' comp reform could impact WCIRB's 12.6% pure premium," Don Jergler, Aug. 16, 2012
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