The Workers’ Compensation Insurance Rating Bureau’s Governing Committee just voted and ordered staff to file for a mid-year rate cut of 7.8%, flowering the pure premium rates approved for Jan. 2017. The decision was unanimous.
The Bureau is a private, non-governmental organization financially supported by insurance carriers.
Public members’ actuary Mark Priven uses a slightly different methodology than the Bureau that gives some weight to the industry’s incurred losses. Under Priven’s methodology, the indicated reduction is 9.6%. This information will be presented to Insurance Commissioner Dave Jones at the upcoming rate hearing.
Driving both recommendations are the impacts of the SB 863 reforms – lower medical costs, faster claims settlements and the resolution of many older claims. The developments are driving down the industry’s projected loss ratio by 4.5 percentage point and for the first time in years the projected loss adjustment expense (LAE) ratio. The LAE ratio is down three percentage points in this filing.
Filed by Brad Cain in San Francisco.