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Calif. commissioner lowers comp premium rate filing

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California

California Insurance Commissioner Ricardo Lara lowered a pure premium rate filing proposed by the state’s ratings bureau and declined to add an additional adjustment for COVID-19, the commissioner announced in a statement Wednesday.

Commissioner Lara adopted an average advisory claims cost benchmark of $1.45 per $100 of employer payroll and adjusted the pure premium rates for individual classifications — excluding additional adjustments for COVID-19 — based on the benchmark. The rates will take effect Jan. 1, 2021.

The rate level of $1.45 is about 19.4% lower than the industry-filed average pure premium rate of $1.80 as of July 1, 2020.

The California Workers Compensation Insurance Rating Board had proposed to the commissioner in August a premium rate of $1.56 per $100 of payroll. In September, however, the board’s governing committee voted to amend the filing to reflect information on COVID-19 claims, modifying its early recommendation of $0.06 per $100 of payroll on COVID-19 claim frequency to a range of $0.01 per $100 of payroll for the information sector to $0.24 per $100 of payroll for segments of the health care and social assistance industry sector.

“The WCIRB’s thorough efforts to estimate COVID-19 costs are noted and appreciated but I am not persuaded that there is sufficient and reliable data upon which to base an adjustment for COVID-19 costs,” Commissioner Lara said in a statement.

In his order, he directed workers compensation insurance companies to clearly identify any COVID-19 adjustments in rate filings subsequently submitted to the state’s  Department of Insurance, and directed the WCIRB to collect data on aggregate premium charged for the COVID-19 adjustment on an ongoing basis.

More insurance and workers compensation news on the coronavirus crisis here.

 

 

 

 

 

 

 

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