Brace for Impact II, (Jan ‘10 pure premium increase)

The Workers Compensation Insurance Rating Bureau, (www.wcirbonline.org), has filed for a January ‘10 pure premium advisory rate increase of 22.8% on all California Workers Compensation policies. This suggested increase is on the basis of claims data they’ve received and on some Workers Compensation cases winding a complicated path through the Workers Compensation Appeals Board, (the Supreme Court of Work Comp).

Last July the Bureau filed for a 23.7 pure premium increase, but the Commissioner of Insurance declined the Bureau’s advice and approved a zero premium increase. Various California carriers have raised rates, although, (generally), not to the extent the Bureau had advised.

Now, with the Bureau coming out again for a substantial advised adjustment, and with a Gubernatorial race coming next year, it could be that the Commissioner will again advise against any pure premium change.

The problem for California employers is that insurance carriers may be able to keep their rates mostly stable for the next 12-18 months, but at some point they’ll likely have to raise rates dramatically. After all, the Bureau is looking at all the claims data for all employers and policies in California, and their data tells them that carriers are sitting on ticking time bombs and the fuses are getting shorter by the minute.

So if you’re reading this, please call or write your broker and inquire about ideas and methods to reduce your Experience Modification. If your ex-mod is higher than 1.00, (which is just average – like a C in school), it’s possible you can make some moves and get your mod down. Do it, so you’ll be braced for impact. Cheers.