On Nov. 4 Insurance Commissioner Dave Jones issued the following statement regarding the Workers' Compensation Insurance Rating Bureau's (WCIRB) advisory pure premium rate filing:
“I am pleased to announce that the advisory rate filing proposed by the California Department of Insurance has been approved,” says Jones. “The advisory claims cost benchmark has been set at $2.30 per $100 of employer payroll.”
The advisory pure premium rate measures the cost of workers' compensation claims and the expenses to adjust those claims over the next policy year for workers' compensation insurance. It appears that current rate filings from insurers have slightly exceeded their cost estimates.
The WCIRB filing provides greater information on current insurance company rates and pricing than previous filings. Insurers are charging employers insurance premiums close to the estimated cost of benefits and adjusting expenses.
However, insurers filed much higher manual rates, the rates that could be charged to employers, and are substantially discounting those manual rates. This has helped to keep workers' compensation insurance prices generally stable despite increasing costs, particularly for medical care.
The pure premium rates to be used by the WCIRB rate will become effective January 1, 2012.
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