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California ratings bureau proposes small workers comp premium increase for 2018

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California ratings bureau proposes small workers comp premium increase for 2018

The California Workers' Compensation Insurance Rating Bureau on Friday submitted its proposed Jan. 1, 2018, pure premium rate filing to the California Department of Insurance seeking advisory pure premium rates that average $2.01 per $100 of payroll. 

The figure is 14.3% less than the corresponding industry average filed pure premium rate of $2.34 as of July 1, 2017, and 0.5% more than the average approved July 1, 2017, advisory pure premium rate of $2.00, according to the Oakland, California-based ratings agency. 

The small proposed increase follows five consecutive advisory pure premium rate decreases since early 2015 that have totaled more than 27%, the bureau stated in a press release. 

The proposed advisory pure premium rate level for Jan. 1, 2018, while slightly above the average approved July 1, 2017, pure premium rate, is more than 7% below the average Jan. 1, 2017, advisory pure premium rate. 

There are several factors that led to the July 1, 2017, advisory pure premium rate decrease including downward loss development, acceleration in claim settlement, accident year 2016 losses emerging below the projected level, improving loss adjustment expense trends and increasing wage inflation, the bureau stated. 

However, several of these factors have now recently moderated. In addition, increasing cumulative injury claim frequency and rising claim severity are eroding the positive impacts, leading to an indicated Jan. 1, 2018, pure premium rate level that is slightly above that of the July 1, 2017, pure premium rate level, the bureau stated. 

The CDI will schedule a public hearing to consider the filing.

 

 

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