California's workers' comp benchmark rate lowered
The lower advisory rate is below the $1.50 average proposed by the Workers’ Compensation Insurance Rating Bureau of California.
California’s workers’ comp benchmark rate now sits at $1.46 per $100 of payroll, a decline of 2.6% compared with the year prior, according to the California Department of Insurance (CDI).
The new rate will go into effect in September 2023.
“While our economy continues to grow, insurance companies should be sharing the savings and benefits of increased stability with California’s businesses and workers,” California Insurance Commissioner Ricardo Lara said in a release. “This year’s rate continues the pre-pandemic trend of decreasing costs brought on by workers’ compensation reform.”
The lower rate is below the $1.50 average rate proposed by the Workers’ Compensation Insurance Rating Bureau of California (WCIRB), according to the state’s insurance regulator. WCIRB recommended pure premium rates that were 0.3% higher than the September 2022 advisory rates.
The WCIRB put together a quick reference guide covering the September 2023 changes.
According to CDI, the rate decrease was due to further market stabilization, faster settlements of injured workers’ claims, a decrease in the number of medical services needed per claim and a lower percentage of claims with permanent disability benefits.
CDI noted pure premium rates are only advisory, as California uses an open rating system for workers’ comp, and are based on insurance companies’ cost data, trends and recommendations made to CDI by industry experts.
The new, lower recommended rate is 14.6% lower than the industry-filed average pure premium rate of $1.71 (as of January 1, 2023).
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