California Recommends 22.8 Percent Workers’ Comp Rate Increase

The Workers’ Compensation Insurance Rating Bureau of California said Wednesday, August 12, that it will recommend a 22.8 percent pure premium rate increase that, if approved, would be effective January 1.

The recommendation is driven by rising medical expenses, along with anticipated cost increases that stem from recent California Workers’ Compensation Appeals Board decisions in what are known as the “Almaraz/Guzman” and “Ogilvie” cases, the WCIRB said in a statement.

It is up to Insurance Commissioner Steve Poizner to decide whether he will pass the recommendation on to insurers, who are free to set their own rates in California.

The commissioner last month rejected the WCIRB’s previous rate recommendation. He said he rejected that requested rate increase because he found insurers were inefficient and not applying available tools to control costs.

Given that finding, the commissioner said he will closely scrutinize the WCIRB’s new request.

If the full 22.8 percent increase is approved by the commissioner, pure premium rates in January still would be 55 percent lower on average than in 2003, the WCIRB said.

Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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