The Bureau recommends higher rates!!
The WCIRB, the rating bureau for Workers Compensation in California, announced yesterday that they have filed a 16% pure premium increase to be effective 01/01/2009. Many carriers will consider filing for a rate increase to match this recommendation.
Because our California Workers Compensation marketplace is so vast, (long ago) the CA Dept. of Insurance deemed it necessary to create a rating bureau to gather all appropriate information about the Work Comp system. This includes all the data from carriers about their claims activities and payments. Nationally, other states subscribe to the NCCI. But here in CA, we have our own bureau. They work quite similarly.
This premium filing is big news because it signals that the Titanic is making a sharp u-turn. Businesses will be surprised to see premium increases when all they’ve seen the past few years are decreases.Since Gov. Schwarzenegger and the legislature hammered out some much needed reforms, the Bureau had been recommending reduced premiums. This is the first time in over four years that an increase has been filed. The effect for Business owners would be like skiing into a tree.
That’s the background. What this means is that business must re-visit the fundamentals of their program. Some never left the fundamentals, and their experience mods reflect that stewardship.
Others relaxed a bit and enjoyed the reduced premiums even as their underlying claims activity deteriorated.
Consider this premium filing the warning shot. Contact your broker and initiate activities to make certain that diligence is paid to ex-mod maintenance and improvement now. The California Workers Compensation coverage system is a huge ship, and once it changes course, it is difficult to alter its path. This new premium filing shows that the course has changed.
Cheers, your work comp wonk.
This isn’t the first time in 4 years that the WCIRB has filed for an increase. It filed for an increase for Jan 2008 but it was not approved buy the commissioner. Also, this recommendation has not been approved by the commissioner. A decision is not likely until mid-October so the impact on 2009 policies is not yet known. Lastly, with the steep declines since 2003, the proposed increase put rates back on par with where they were in 2007.
Dear Anonymous, Thank you for writing and for providing that information about the earlier non-approved rate filing. And, certainly each carrier will make their own decision about filing new rates up, down or sitting on what they have. If this filing is approved it will certainly give carriers cover if they do submit higher rates to the Commissioner.