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The insurer and public members of the WCIRB Governing Committee voted unanimously to authorize the WCIRB to submit two filings to the California Department of Insurance. The first filing will contain proposed changes to the Insurance Commissioner’s January 1, 2014 and January 1, 2015 workers’ compensation regulations and will be submitted to the CDI on August 9, 2013. The second filing, which will be submitted to the CDI on or around August 19, 2013, will contain proposed January 1, 2014 advisory pure premium rates.

Traditionally, the WCIRB submitted a single filing containing proposed changes to both the regulations and advisory pure premium rates. This year, the CDI and the WCIRB developed a bifurcated filing process in order to allow insurers more time to modify their operational systems to reflect any approved regulatory changes.

The proposed January 1, 2014 advisory pure premium rates that will be included in the WCIRB filing average approximately $2.62 per $100 of payroll, which is 3.4% above the industry average filed pure premium rate of $2.53 per $100 of payroll as of July 1, 2013.

These proposed advisory pure premium rates reflect the WCIRB’s most current evaluation of Senate Bill No. 863 (published October 12, 2012); however, these proposed advisory pure premium rates do not reflect any provision for the impact of the new physician medical fee schedule which is based on the Resource Based Relative Value Scale (RBRVS) and is under consideration by the Division of Workers’ Compensation (DWC). If the DWC adopts the new schedule, the WCIRB anticipates modifying its proposed advisory pure premium rates based on its evaluation of the cost impact of the new schedule on policy year 2014 medical costs.

The WCIRB’s August 9, 2013 regulatory filing will include proposed amendments to the California Workers’ Compensation Uniform Statistical Reporting Plan – 1995 (USRP), the Miscellaneous Regulations for the Recording and Reporting of Data – 1995 (Miscellaneous Regs) and the California Workers’ Compensation Experience Rating Plan – 1995 (ERP) effective January 1, 2014. The amendments to the USRP include (1) changes to the Standard Classification System, (2) changes to data reporting requirements to conform to national data reporting specifications, and (3) an amendment to provide for the use of collective bargaining agreements to validate an employee’s hourly wage rate for purposes of assignment to a high wage dual classification for audits on policies with an expiration date on or after January 1, 2014. Additionally, a number of amendments will be proposed to the USRP, Miscellaneous Regs and the ERP to facilitate a bifurcated filing process and for clarity and consistency.

The WCIRB will also propose a number of regulatory changes to be effective on January 1, 2015 including amendments to the USRP pertaining to policy reporting requirements and significant amendments to the ERP intended to constrain the impact of a single claim incurred during the experience period to 25 percentage points.