WCIRB SUBMITS JANUARY 1, 2013 PURE PREMIUM RATE FILING
AUGUST 21, 2012
Today, the WCIRB submitted its
January 1, 2013
Pure Premium Rate Filing to the California Department of Insurance (CDI) containing,
among other things, advisory pure premium rates proposed to be effective January
1, 2013. The advisory pure premium rates proposed for the 493 standard classifications
to be effective January 1, 2013 average $2.68 per $100 of payroll; this is 12.6%
higher than the corresponding industry average filed pure premium rates of $2.38
as of July 1, 2012.
January 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 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. The Executive Summary of the Filing contains
additional details concerning these cost drivers and their impact on losses and
loss adjustment expenses.
January 1, 2013 advisory pure premium rates do not reflect any provision for the comprehensive workers' compensation
legislation that is currently under consideration by the California Legislature.
To the extent legislation is enacted that significantly impacts the cost of losses
and loss adjustment expenses on policies incepting in 2013, the WCIRB will evaluate
the cost impact of the legislation and submit an amended set of proposed January
1, 2013 advisory pure premium rates by the time of the public hearing on this Filing.
Similarly, the WCIRB will be reviewing accident year experience valued as of June
30, 2012 once it is received and, if appropriate, will amend the pure premium rates
proposed in this Filing.
In addition to pure premium rates, the Filing includes proposed amendments to the
California Workers' Compensation Uniform Statistical Reporting Plan - 1995 (USRP),
the Miscellaneous Regulations for the Recording and Reporting of Data - 1995 and the California
Workers' Compensation Experience Rating Plan - 1995. These proposed amendments are
detailed in Part B of the Filing. All of these recommended changes are proposed effective
January 1, 2013 with the exception of the revision to the physical audit requirement
related to dual wage classifications found in the USRP. The change to the audit
requirement is proposed to be effective on policies incepting on or after January
1, 2014 to allow insurers sufficient time to implement the change.
The CDI will hold a public hearing on the matters contained in the WCIRB's Filing.
It is expected that the CDI will announce the date of the hearing within the next
week. Once the date, time and location of the hearing are set, the WCIRB will add
that information to its website and issue a WCIRB Wire story.
The Filing and all related information may be viewed, printed and downloaded from
the Regulatory Filings section of the WCIRB website.
To learn more about workers' compensation pure premium rates, see the "Rates You
Pay" educational module located in the Helpful Information section of the website.
See Helpful Information > WCIRB Guide to Workers' Compensation Insurance > The Rates