WCIRB recommends 29.6% pure premium hike

By CMTA Staff

Capitol Update, Aug. 13, 2010 Share this on FacebookTweet thisEmail this to a friend

On Wednesday this week, the Workers’ Compensation Insurance Rating Bureau (WCIRB) voted to recommend a 29.6% increase on California’s pure premium rate.  Insurance Commissioner Steve Poizner has until January 1 to accept, modify or reject this recommendation. The Commissioner has rejected most of WCIRB’s recommendations in the past.  Poizner will hold a public hearing on September 28 to review the WCIRB’s recommendation.

WCIRB points to rising costs in medical expenses, the number of injury claims in 2009 and the lack of a pure premium increase in the past year as the benchmark for this recommendation.  It also assumes that medical costs will increase 9% in 2011 and indemnity costs will increase 6%.

Governor Schwarzenegger has also weighed in sending Commissioner Poizner a letter urging him to once again reject the WCIRB recommendation:

“I am confident you will not allow such a tremendous financial burden on California businesses at this time.  We must protect the 2004 workers’ compensation reforms, which reduced rates by 65% and have saved employers more than $50 billion. These reforms provided insurance companies with powerful tools to control costs, and they must use these tools effectively before we consider raising employer rates.”

Employers are watching this debate closely. It is important to keep stability within the system and if insurance companies don’t price appropriately, they can go insolvent with employers paying for it.

For more information on the WCIRB announcement go to this link: wcirbonline.org/wcirb/wcirb_wire/2010/2010_07.html
 

 

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