Jones Recommends 10.2% Cut in Workers’ Compensation Rate

State Insurance Commissioner Dave Jones (D) has adopted a workers’ compensation pure premium rate that is more than 10% lower than the current rate, the Insurance Journal reports.

Under state law, the insurance commissioner can only make rate recommendations. However, most insurers typically make changes in line with such recommendations, according to the Business Journal (Insurance Journal, 5/8).

In April, the California Workers’ Compensation Rating Bureau recommended that $2.46 per $100 of payroll be spent on workers’ compensation. WCIRB recommended that the proposed pure premium rates take effect July 1 (California Healthline, 4/7).

Details of Rate

The rate approved by Jones was proposed by the California Workers’ Compensation Insurance Rating Bureau’s (Insurance Journal, 5/8).

The proposed rate marks a 10.2% decline from the current advisory rate of $2.74 per $100 of payroll. In addition, it is 5% lower than the current insurance industry average of $2.59 per $100 of payroll (California Healthline, 4/7).

According to the Los Angeles Business Journal, the decision to recommend a mid-year cut is uncommon, as the commissioner typically does so just once a year for policies that renew after Jan. 1.

However, Jones noted that the change was possible because of data showing that medical costs for caring for injured workers have decreased recently (Fine, Los Angeles Business Journal, 5/8).

Source Link