WCIRB TESTIFIES AT DEPARTMENT OF INSURANCE PUBLIC HEARING
November 16, 2012
Today, WCIRB President Bill Mudge and Chief Actuary Dave Bellusci testified at a
public hearing held in Sacramento by California Insurance Commissioner Dave Jones
with respect to the WCIRB's January 1, 2013 Pure Premium Rate Filing. The filing
was submitted to the California Department of Insurance on August 21, 2012 and later
amended on October 1, 2012. (See related story WCIRB Submits Amended January 1,
The filing contains proposed January 1, 2013 pure premium rates that average $2.38
per $100 of payroll, the industry average filed pure premium rate as of July 1,
2012, and proposed changes to the Commissioner's regulations contained in the California
Workers' Compensation Uniform Statistical Reporting Plan - 1995 and the California
Workers' Compensation Experience Rating Plan - 1995.
The filing data shows a continued deterioration in insurer loss experience and,
after reflecting the impact of Senate Bill No. 863 (SB 863), an actuarially indicated
average pure premium rate of $2.61 per $100 of payroll. Despite the indication,
the WCIRB did not propose an overall increase in advisory pure premium rates effective
January 1, 2013. In his testimony, Mr. Mudge noted that with the enactment of comprehensive reform
legislation, there is an unusually high level of uncertainty surrounding yet to
be developed regulations and there is the potential for additional savings from
SB 863 in the actuarial projections and the potential for significant additional
cost savings beyond that which is currently quantifiable. Mr. Bellusci advised the
Commissioner that the WCIRB will be actively monitoring emerging post-reform costs
and will again review the most current insurer experience in the first quarter of
2013 in consideration of a potential July 1, 2013 pure premium rate filing.
The public record for the hearing will close at 5:00 pm, November 19, 2012. Once
closed, the Insurance Commissioner has 30 days to issue his decision, in which he
may accept, reject or modify the WCIRB's recommendation.
The filing and related information is available in the Regulatory Filings section
of the WCIRB website.