Flash Report: Mid-Year Rate Filing

Against the backdrop of a possible wave of post-termination cumulative trauma claims, and amid growing pressure from organized labor and worker advocates for a presumption that COVID-19 infections are work-related, the Bureau made a decision.  The Workers’ Compensation Insurance Rating Bureau’s Actuarial Committee decided against making a mid-year rate filing.

Actuarial reviewed the year-end 2020 claims data and is basing the recommendation both on what the claims data indicates, as well as the uncertainty surrounding the Chinese COVID-19 pandemics impact on the economy.

Absent the COVID-19 situation; a filing was unlikely given that the rate indication for July 1st, 2020 policies would be in-line with the pure premium advisory rate that Insurance Commissioner Ricardo Lara approved for January 1st, 2020.

The Bureau is a private organization with governmental responsibility. It is financially supported exclusively by insurance carriers in whose interests it operates.

Economic forecast numbers continue to be revised downwards in light of the pandemic and the rapid loss of jobs.

The expectation is that the pandemic and the subsequent shelter-in-place orders will, at least in the short-term, have a significant downward impact on workers’ comp claim frequency. That will be balanced by shrinking payroll. Medical costs are delayed as injured employees avoid seeking care during the crisis.

The Bureau’s Governing Committee will make the decision official next week.

 

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