Today, the WCIRB Governing Committee voted to authorize the WCIRB to submit a January 1, 2018 Advisory Pure Premium Rate Filing to the California Insurance Commissioner.
The Filing will propose advisory pure premium rates that average $2.01 per $100 of payroll, which is 14.3% less than the industry average filed pure premium rate of $2.34 as of July 1, 2017, and 0.5% more than the average approved July 1, 2017 advisory pure premium rate of $2.00. This modest proposed increase follows five consecutive advisory pure premium rate decreases since early 2015 that have totaled more than 27%.
In his presentation to the Governing Committee, WCIRB EVP and Chief Actuary Dave Bellusci noted that the indicated January 1, 2018 average advisory pure premium rate, while slightly above the average approved July 1, 2017 pure premium rate, is more than 7% below the average January 1, 2017 advisory pure premium rate. Mr. Bellusci identified some of the factors contributing to this reduction over the last year:
• Medical losses have continued to develop downward
• Claim settlement rates have continued to accelerate
• Increasing loss adjustment expense trends have moderated
• Increased wage growth is being forecast
Mr. Bellusci also noted that countering these favorable trends and contributing to this modest proposed increase from the average approved July 1, 2017 advisory pure premium rates are recently rising average claim severities and continued sharp growth in the volume of cumulative injuries.
The WCIRB will submit its January 1, 2018 Pure Premium Rate Filing to the California Department of Insurance (CDI) on or around August 18, 2017. The CDI will schedule a public hearing to consider the Filing and once the Notice of Proposed Action and Notice of Public Hearing is issued, the WCIRB will post a copy in the Filings and Plans section of the WCIRB website (www.wcirb.com).