Calif. proposes 7.2% midyear pure premium rate reduction
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The Workers Compensation Insurance Rating Bureau of California is proposing a 7.2% midyear pure premium rate reduction for California businesses, according to notice regarding a public hearing held before the California Department of Insurance on Wednesday.
The ratings bureau is proposing an advisory pure premium rate of $1.80, which is 7.2% less than the California insurance commissioner’s approved average Jan. 1, 2018, advisory pure premium rate of $1.94 and 19.0% lower than the corresponding industry average filed pure premium rate of $2.22 as of Jan. 1, 2018. The new rate would go into effect July 1.
Dave Bellusci, WCIRB executive vice president and chief actuary, along with President and CEO Bill Mudge presented at a hearing before the commission the actuarial basis for the decrease, highlighting the key drivers of the WCIRB’s seventh consecutive proposed advisory pure premium rate decrease. They told regulators that the rationale included favorable loss development largely driven by significant increases in claim settlement rates, a sharp decline in lien filings following the implementation of state law, and anticipated savings resulting from the new drug formulary.
The insurance commissioner is expected to issue a decision in the next 30 days, according to WCIRB.
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