California DOI to reconsider pure premium rate filing, other reg revisions
The organization is seeking to use collective bargaining agreements to validate an employee's hourly wage rate, change a classification system, and amend other items.
Meanwhile, the WCIRB will also be updating its pure premium rate filing to the Department of Insurance for policies starting or renewing in January. The rating board had previously said it would recommend insurers increase their rates by 3.4 percent above the industry average. However, the board's governing committee may change that to a 6.9 percent increase based on a review of the June 30, 2013, insurer loss and loss adjustment expense experience.
The latest experience "showed significant adverse medical loss development and increasing indemnity claim frequency relative to the March 31, 2013 experience that was presented to the [WCIRB] governing committee on August 7, 2013," the WCIRB said in a statement on its website. "Based on this deterioration the governing committee will reconsider the average advisory pure premium rate of $2.62 per $100 [of payroll] that was indicated based on March 31, 2013 experience."
The insurance commissioner's decision on the rate filing is generally used as a benchmark since insurers in California set their own rates.
The previous review of insurer loss and premium experience through March 31, included the following findings:
- California written premium (gross of deductible credits) for calendar year 2012 is approximately $12.5billion, about 16 percent above the written premium reported for 2011 and 42 percent above the written premium reported for 2009.
- Written premium for the first quarter of 2013 is approximately $3.9billion, about 18 percent above the written premium reported for the first quarter of 2012.
- The projected ultimate accident year combined loss and expense ratio for accident year 2012 is 117 percent -- below that of the prior three accident years, mainly due to increasing premium levels, modest claim cost trends, and lower insurer expense ratios in 2012.
- The calendar year combined loss and expense ratio for 2012 reported by insurers is 115 percent, representing the fourth straight calendar year with a combined ratio of over 110 percent.
- The projected indemnity claim frequency for accident year 2012 is 1.7 percent above the frequency for 2011 and 6.5 percent higher than 2009. The projected indemnity claim frequency for the first quarter of 2013 is 0.4 percent higher than that for 2012.
By Nancy Grover
Read more at the WorkersComp Forum homepage.
October 14, 2013
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