California bureau to recommend 12.6% increase for workers compensation premiums
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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.
On Wednesday 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 WCIRB recommended for July 2012 renewals and new policies.
The rate increase recommendation is subject to revision, depending on workers comp reforms now under consideration in Sacramento and a review of upcoming loss experience data, the WCIRB said in a statement.
The rating organization plans to submit its rate filing to the Department of Insurance around Aug. 21.
“The indicated Jan. 1, 2013, average advisory pure premium rate of $2.68 represents an approximate 10% deterioration in experience from the WCIRB's July 1, 2012, indication,” the organization said in its statement. “The deterioration is attributable to continued adverse loss development, elevated indemnity claim frequency, an increase in the projection of future loss inflation, an increase in allocated loss adjustment expense and lower wage growth forecasts.”
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