The Workers Compensation Insurance Rating Bureau of California proposed in its Jan. 1, 2020, pure premium rate filing submitted to the California Department of Insurance that rates be about 5.4% less than the current advisory pure premium rates.

The average of the Jan. 1, 2020, advisory pure premium rates, including the impact of the payroll limitation previously adopted by the Commissioner for five classifications, is $1.58 per $100 of payroll, WCIRB said Tuesday in a statement. If adopted, this would be the ninth consecutive pure premium rate decrease since 2015, totaling approximately 45%.

The proposed pure premium rates are based on loss experience valued as of March 31, and the proposed average decrease reflects continued downward loss development, acceleration in claim settlements, sharply declining pharmaceutical costs and a further decline in the number of liens being filed, said the release. In the filing, the WCIRB also noted that factors such as increases in cumulative trauma claims, rising claim severities and continued high levels of allocated loss adjustment expenses are moderating the pure premium rate declines and warrant continued monitoring.

The Jan. 1, 2020, proposed advisory pure premium rate is based on:

• Insurer losses incurred during accident year 2018 and prior accident years valued as of March 31
• Insurer loss adjustment expenses for 2018 and prior years
• Classification payroll and loss experience reported for policies incepting in 2016 and prior years
• The 2020 experience rating off-balance correction factor

The pure premium rates, which reflect loss costs including loss adjustment expenses per unit of exposure, are only advisory in that an insurer is not required to use either the proposed or the approved pure premium rates in establishing the rates it will charge, said the WCIRB.

The WCIRB will be reviewing accident year experience valued as of June 30 once it is received and, if authorized by the WCIRB Governing Committee, will amend the pure premium rates proposed in this filing. The WCIRB will also evaluate the estimated cost impact of any legislative, regulatory or significant judicial decisions issued prior to the public hearing on the filing, said the release.