California Workers' Compensation Insurance Rating Bureau’s (WCIRB) governing committee recently authorized the Board to submit a pure premium rate advisory applicable to January 1, 2017 to the state Insurance Commissioner, according to reports.
According to the filing, the WCIRB will propose an average pure premium rate of $2.26/$100 of payroll. The rate is 11% less than the corresponding industry average of $2.54 filed for July 1 this year; and 2.6% less than the $2.32 average approved for the same date.
The downtrend marks the fourth consecutive decrease in the filing of pure premium rates of the WCIRB, totalling -18.6% compared to the average advisory at the start of 2015.
WCIRB chief actuary Dave Bellusci said that the average advisory pure premium rate for January 1. 2017 changed at -7.5% compared to the corresponding rate for January 1, 2016.
He credits the lower rate to favourable developments in medical losses on 2014 and prior accident years; 2015 medical claim costs are lower than projected levels; faster indemnity claims settlements; and future wage level growth forecasts for California.
However, Bellusci said that the loss adjustment expenses and indemnity claims frequency came out higher than projected. Still, favourable medical loss trends have more than made up for these losses, he added.
The WCIRB will file the proposed pure premium rate for the start of 2017 this August 19, after which it will go through a public hearing.
