* Failing to collect detailed transactional data;
* The accuracy and completeness of some of the data it relies on for its recommendations;
* Not properly policing carriers which submit incomplete, inaccurate data or fail to submit it in a timely fashion.
The report also calls for improvements in the Bureau's actuarial projections and the process by which it makes rate recommendations. The report calls on the Bureau to use multiple actuarial projection methods and then offer CDI a range of pure premium rate recommendations, rather than presenting a single finding. In itself this is a controversial finding and will change the nature of and likely add to the contentiousness of the process
The report calls on the Bureau to work closely with the State Compensation Insurance Fund to ensure that its data collection and reporting system is working as it should. There have been issues with how State Fund is reporting specific data types. Large chunks of SCIF's data have either been excluded outright or tempered in recent rate filings, including the current one.
Jack Hannan, spokesmen for the WCIRB, noted that the Bureau was not surprised by the audit findings as many of the issues have been raised in the past and are already being addressed. "In terms of the collection of transactional level data, we have a group that's looking at additional data and we're going to provide something to the department in October related to this issue," he said.
And the Bureau is already in substantial compliance with another recommendation - that carriers submit their data electronically. WCIRB launched its web-based aggregate data submission system a year ago and now data covering 99% of the insured market is being submitted quarterly via the system.
Hannan says the Bureau will be meeting with CDI within the month to discuss the recommendations in detail and to develop a plan of action.
In releasing the report, Insurance Commissioner Steve Poizner cited his concerns about the quality of the Bureau's past rate recommendations and their cost implications for employers.
"Especially in a time when the Rating Bureau is requesting unprecedented rate hikes, we must carefully scrutinize all the data involved in making this decision to ensure that any change in the benchmark is warranted," Poizner said in a release. "Every additional dollar spent on workers' compensation insurance is a dollar that an employer cannot use to save or create a job."