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California holds comp pure premium rate


California Insurance Commissioner Ricardo Lara for a third consecutive year rejected a proposed increase to the workers compensation advisory pure premium rate.

Faced with two recommendations to increase the rate and one to reduce it slightly, Lara split the difference and ordered the rate remain unchanged at $1.45 per $100 of payroll.

The WCIRB recommended the commissioner adopt an advisory rate of $1.56 per $100 of payroll for policies incepting on or after Sept. 1. The recommended rate is a 7.6% increase over the rate the commissioner adopted last year.

CDI Attorney Yvonne Hauscarriague recommended the commissioner set the advisory rate at $1.49 — including the add-on for COVID-19 claim costs — based on an analysis conducted by the department’s actuarial staff.

Mark Priven, vice president and principal of special projects for Bickmore Actuarial and a consultant to public members of the WCIRB’s Governing Committee, recommended a slight reduction to $1.44.

Mr. Lara said all the recommendations fall within the reasonable actuarial range. Citing uncertain economic conditions, he said he believed it would be appropriate to keep the advisory rate unchanged.

“I have determined that there exist a number of issues in the record that remain uncertain and warrant further monitoring before an adjustment to the pure premium rates needs to be made,” Mr. Lara wrote in Friday’s decision.

The commissioner also rejected a proposal to include a 0.008 cent add-on to account for costs of COVID-19 claims.

“Taking into account the unpredictability around COVID-19’s future impact on the workers compensation insurance system, and given the very modest indication, I do not believe an additional charge for COVID-19 is warranted at this time,” Mr. Lara said.

WorkCompCentral is a sister publication of Business Insurance. More stories here.