Last week The WCIRB proposed a July 1, 2017 average advisory pure premium rate of $2.02 per $100 of payroll which is 16.5% lower than the corresponding industry average filed pure premium rate of $2.42 as of January 1, 2017 and 7.8% less than the Insurance Commissioner’s approved average January 1, 2017 advisory pure premium rate of $2.19.
The recent rate decline is therefore favorable to employers:
And following this announcement, Department of Industrial Relations Director Christine Baker made the following statement on the Workers’ Compensation Insurance Ratings Bureau’s recommendation for a mid-year 7.8 percent rate reduction:
“The 2012 reforms in SB 863 sought to increase benefits and improve care to injured workers while controlling rising costs for employers. Not only did benefits for injured workers increase by 30 percent, but an anticipated rate spike was prevented. Employers have had four consecutive rate reductions, and today’s recommendation will continue that trend”.
“Since 2012, DIR has made significant strides in its quest to eliminate medical provider fraud and illegitimate liens, and is continuing its efforts to launch a prescription drug formulary. These reform efforts seek to further improve treatment of injured workers while reducing costs in the system that would have been paid by employers. As evidenced by the WCIRB’s recommendation for a mid-year rate reduction, our recent reforms have brought both stability and sustainability to California’s workers’ compensation system.”
However, staying within the sports metaphor, the industry must also keep in mind the slogan “yesterday’s hits do not win today’s ball game.”
The Pennsylvania state Insurance Department approved a reduction in the annual workers’ compensation insurance premium rate, which the governor said will save employers $150 million. Benefits for injured workers will not be affected.
The Montana State Fund board of directors has reduced workers’ compensation rates by 5 percent, state officials said Wednesday, adding it was the 11th year in row that rates have remained the same or decreased.
The Ohio Bureau of Workers’ Compensation (BWC) has proposed a $1 billion rebate for Ohio’s private and public employers, the third such rebate since 2013.
The Maine Bureau of Insurance has approved a 4.3 percent decrease in the workers’ compensation insurance “loss cost” rate, which is expected to save Maine employers a combined $9.5 million over the next 12 months.
These are just recent examples of rate reductions occurring across the nation. SB 899 was of course a good start for California. It may not be the last successful play that is needed.