On September 18, 2015, the California Insurance Commissioner approved numerous changes to the California Workers’ Compensation Uniform Statistical Reporting Plan – 1995 (USRP), the California Workers’ Compensation Experience Rating Plan – 1995 (ERP) and the Miscellaneous Regulations for the Recording and Reporting of Data – 1995 (Miscellaneous Regs) effective January 1, 2016. See Commissioner Issues Decision on Regulatory Filing for more information.
The WCIRB’s January 1, 2016 Regulatory Filing which was submitted to the California Department of Insurance (CDI) on June 26, 2015 and subject to a public comment period that ended on September 2, 2015. In the decision, the Commissioner approved all of the WCIRB’s proposed changes.
In 2016, changes to the Standard Classification System clarify the application of some classifications and to amend minimum and maximum payroll limitations. An amendment to the unit statistical reporting requirements to specifies that the cost of independent bill review (IBR) and independent medical review (IMR) will no longer be included as part of the medical cost containment component of allocated loss adjustment expense effective on all IBR and IMR reports paid after January 1, 2016. The cost of IBR and IMR will continue to be included in reported allocated loss adjustment expense. An amendment to the ERP to use expected loss rates rather than pure premium rates as the basis for experience rating eligibility was also approved. This change in the basis of eligibility, while not significantly impacting which employers will be eligible for experience rating, allows the WCIRB to begin issuing January 2016 experience modifications almost immediately – months sooner than previously possible.
For 2017, changes to the ERP will allow the WCIRB to issue debit experience modifications, in specified circumstances, excluding the unaudited payroll for policyholders who are uncooperative at the time of a final audit. The Commissioner also approved a significant change to the experience rating formula, replacing the fixed $7,000 primary and excess loss split point with a split point that varies based on the size of the employer. This change enhances the accuracy of the experience rating formula, especially for smaller employers; reduces volatility and provides flexibility for simplifying the experience rating formula in future years. The WCIRB conducted extensive outreach regarding this change prior to the close of the public comment period.
The WCIRB has also updated the Classification Search tool to reflect changes to classification phraseologies effective January 1, 2016.