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News & Press: Workers Compensation

Insurance Commissioner Jones Has Ruled on the Worker's Compensation Advisory Rate for 2015

Thursday, November 20, 2014   (0 Comments)
Posted by: Mark Alpert
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The advisory benchmark claims rate winds up at $2.74, which is lower than the WCIRB proposed rate of $2.77, but higher than the public actuary proposed rate of $2.69.

The Commissioner's actuaries reviewed information supplied by both the WCIRB and the public member actuary, Mark Priven of Bickmore Risk Services. CALPASC Director of Risk Management Bruce Wick testified alongside Mark at the public hearing, requesting Commissioner Jones to follow the $2.69 figure.

The previous figure for 2014 was $2.70, so the revised advisory rate for 2015 is a 1.5% rate increase. Since the rate is advisory, actual premium proposals from insurers will vary.

The good news is that the reforms of SB 863 from 2012 continue to curve claim costs downward. Much of the data from the various times reform measures kicked in is recent, so the trends are not as established as most actuaries like to see them.

CALPASC members are encouraged to continue to get together with their brokers or advisors well ahead of their next renewal. As we have stated in previous memos, underwriters and insurers are well aware of the key issues involving pricing Worker's Compensation coverage. These include:
1. The quality of your safety program.
2. How effectively you as an employer are in sync with the important issues embraced by SB 863, including your MPN, and claims communications with claim adjusters.
3. The region you operate in. The further away you operate from Los Angeles County, the better loss results tend to be.
4. Your loss history should be reviewed and claims costs that would not continue under SB 863 procedures can be requested to be taken out or discounted.
You can see a copy of Commissioner Dave Jones ruling by clicking here.

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