California reports comp premium declinesPosted On: Oct. 6, 2020 12:59 PM CST
Written workers compensation premium in the state of California for the first two quarters of 2020 dropped more than 10% from the same quarter in 2019, according to a report released Monday by the state’s Workers Compensation Insurance Ratings Bureau. However, the state’s number of COVID-19 workers comp claims relative to coronavirus infections in the state has fallen to less than 5%.
According to the WCIRB’s quarterly experience report, based on figures as of June 30, the impact of the pandemic will likely continue to reduce payrolls in the state and negatively affect insurer premiums for the rest of the year.
Premium charges have dipped 8% in the first and second quarters of 2020 compared with the same quarters in 2019, and are 40% less than the peak rates charged in 2014.
As a result of the impact of the pandemic, the WCIRB has proposed that the pure premium rate in the state, which has been on the decline, be increased by 2.6% to $1.56 per $100 of payroll, the ratings bureau’s actuary presented Monday to the California Department of Insurance at a public hearing.
In August, the bureau proposed a 4% increase in pure premium rates, but decreased that proposed amount in September after noting moderation of “pre-pandemic trends in loss development and claim settlement” as well as COVID-19 claim cost projections.
According to the bureau, COVID-19 comp claims filed relative to the number of coronavirus infections in the population between July 24 and Aug. 28 was at 4.8%, despite the fact that A.B. 1159, which expanded comp availability by presuming that certain classes of workers who contracted coronavirus did so at work, took effect during that period. COVID-19 claims filed relative to California coronavirus infections from Jan. 1 through July 23 averaged about 6.35%.
California’s insurance commissioner is expected to decide on WCIRB’s rate filing within 30 days.
More insurance and workers compensation news on the coronavirus crisis here.