Today, the WCIRB submitted to the California Department of Insurance (CDI) a Regulatory Filing containing proposed changes to the Insurance Commissioner’s regulations contained in 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). Most of the amendments proposed in the filing are proposed effective January 1, 2016. A few amendments related to experience rating are proposed to be effective January 1, 2017.
For January 1, 2016, the WCIRB proposed changes to the Standard Classification System to help clarify the application of some classifications and to amend minimum and maximum payroll limitations and hourly wage thresholds for several dual wage classifications. The WCIRB also proposed an amendment to the unit statistical reporting requirements to specify that the cost of independent bill review (IBR) and independent medical review (IMR) 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 proposed 2016 changes to the Experience Rating Plan include basing experience rating eligibility on expected loss rates rather than advisory pure premium rates. This change, if approved by the Insurance Commissioner, will permit the WCIRB to begin issuing January 2016 experience modifications months sooner than previously possible.
For 2017, the WCIRB proposed two changes to the Experience Rating Plan. The first would allow the WCIRB to issue debit modifications, in specified circumstances, excluding the unaudited payroll for policyholders who are uncooperative at the time of a final audit. The second replaces the fixed $7,000 primary and excess loss split point with a variable split point that varies based on the size of the employer. A variable split point 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 complete filing containing all of the WCIRB’s proposed changes, and any related documents are available in the Publications and Filings section of the WCIRB website (www.wcirb.com). The WCIRB website will be updated to provide a copy of the Notice of Proposed Action once it is received from the CDI.
This filing does not contain proposed changes to the advisory pure premium rates. The WCIRB anticipates submitting the January 1, 2016 Pure Premium Rate Filing this August.