Posted on 19 Mar 2009
On Wednesday the Workers' Compensation Insurance Rating Bureau of California (WCIRB) recommended a 24.4% increase in pure premium rates to the California Insurance Department.
The WCIRB based its recommendation on an indicated increase in the claims cost benchmark of 17.6% of losses in 2008. Higher claims costs are largely due to increased medical costs, said the WCIRB.
Another reason for the premium rate increase is due to anticipated cost increases from three Workers' Compensation Appeals Board decisions, which indicate an additional 5.8% hike in claim costs, the WCIRB said. The 5.8% is a "minimum estimate" of the potential costs arising from the three case decisions, the WCIRB said in a statement, as no cost data is available yet. The WCIRB noted that the costs arising from the decisions could be even higher than anticipated.
If approved by the insurance department, the 24.4% increase in pure premium rate would be effective July 1. The rate, the WCIRB said, still will be on average 54% lower than the approved pure premium rates in effect July 2003.