In workers' compensation defense news, the governing committee of the Workers' Compensation Insurance Rating Bureau of California -- the organization that advises the state's Insurance Commissioner on workers' compensation base rates -- convened for a meeting in San Francisco yesterday to discuss a possible rate change.
According to a released statement from WCRIB, the governing committee will not be making a midyear filing recommending an increase in the workers' compensation rates that insurance companies charge employers across the Golden State.
The WCIRB Governing Committee raised the possibility late last year that it may have to recommend a midyear average pure premium rate increase for July 2013 if Senate Bill 863 -- the work comp reform measure that passed in September and went into effect January 1 -- failed to perform as expected.
However, WCRIB indicated that there is currently "no new information" on the actual impact of SB 863 (i.e., whether it's generating sufficient cost savings) to justify a midyear filing.
In its released statement, WCIRB noted that the average pure premium for July 1, 2013 is $2.61 per $100 of payroll, the exact same as the average pure premium rate outlined in its amended rate filing for Jan. 1, 2013. Furthermore, the bureau noted that this was only $.06 cents higher the current industry average pure premium.
(Pure premium rates are figures that reflect the actual or anticipated costs to insurers stemming from indemnity payments and other allocated losses; overhead costs and profits are not included in the calculation)
Under the current system, WCIRB advises the Insurance Commissioner on workers' compensation pure premium rates several times a year, recommending either increases or decreases. The Insurance Commissioner is then free to either accept or reject these recommendations when advising California's licensed workers' comp companies on rate adjustments.
In addition, California's 400 licensed workers' comp companies may also accept or reject WCIRB's recommendations and establish their own rates. (They typically use the Insurance Commissioner's recommendations as their primary benchmark.)
Stay tuned for further developments in the area of workers' compensation defense law ...
Business Insurance, "Calif. workers comp bureau won't seek midyear pure premium rate change," Sheena Harrison, April 3, 2013
Workers' Compensation Insurance Rating Bureau of California, "No July 2013 filing as new governing committee convenes," April 3, 2013