San Francisco, CA March 18, 2008 - Earlier today, the WCIRB Governing Committee directed the WCIRB to submit a filing to the California Department of Insurance (CDI) recommending an approximate 24.4% increase in pure premium rates (or "claims cost benchmark") effective July 1, 2009. The Governing Committee made its decision based on a recommendation made by the WCIRB Actuarial Committee at its March 16, 2009 meeting.

The recommendation is based on two principal components. First, the WCIRB's evaluation of December 31, 2008 loss experience produces an indicated increase in the claims cost benchmark of 17.6%. This indicated increase is primarily the result of increased medical costs. Second, the WCIRB's analysis of anticipated cost increases stemming from three recent Workers' Compensation Appeals Board decisions (Ogilvie v. City and County of San Francisco, Almaraz v. Environmental Recovery Services and Guzman v. Milpitas Unified School District) indicates an additional increase of 5.8%. Throughout its discussion, there was a general consensus among Governing Committee members that 5.8% is a "minimum estimate" of the potential additional costs arising from these decisions inasmuch as no cost data is yet available. It is quite likely that the actual additional costs arising from these decisions could be significantly higher.

If the full 24.4% increase is approved by the Insurance Commissioner, the July 1, 2009 pure premium rates will still be, on average, 54% lower than the approved pure premium rates in effect July 1, 2003.

Labels: law, regulations