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California's Workers Compensation Bureau proposes rate hike

California's Workers Compensation Bureau proposes rate hike

California's Workers Compensation Insurance Rating Bureau will recommend a 12.6% average pure premium rate increase that would be effective Jan. 1, 2013, for new and renewing policies.

The rate increase recommendation must be approved or rejected by California's Department of Insurance, which can only recommend that insurers consider rate increases or decreases.

Last week, the rating bureau's governing committee unanimously voted to authorize the rate filing. It would raise the average advisory rate to $2.68 per $100 of payroll, up from the $2.38 per $100 of payroll the bureau recommended for July 2012 renewals and new policies.

Meanwhile, a workers compensation reform bill set to be proposed in California would limit some companies' ability to self-insure for workers comp claims and would increase total permanent disability benefits for workers by $720 million per year, according to a summary of the bill posted online.

The summary of S.B. 863, drafted by the California State Assembly Committee on Insurance, was posted last week by the Sacramento Business Journal.

It lists 45 amendments to be included in the upcoming reform bill.

Professional employer organizations and temporary staffing agencies would be prohibited from self-insuring for workers comp coverage. PEOs and staffing firms that are self-insured would be required to purchase workers comp insurance by Jan. 1, 2015.

Another point says aggregate permanent disability benefits would increase by about $720 million per year during a two-year period.

The bill also would establish an independent medical review process for workers comp medical treatment disputes, as well as an independent bill review process.