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Governing Committee Votes for Mid-Year Filing

Citing lower medical loss development, as well as indemnity and medical severities that continue to emerge below expectations, the insurer and public members of the WCIRB Governing Committee voted today to authorize the WCIRB to submit a mid-year pure premium rate filing to the California Department of Insurance (CDI). The filing will propose a July 1, 2015 advisory pure premium rate of $2.46 per $100 of payroll which is 5.0% lower than the corresponding industry average filed pure premium rate of $2.59 as of January 1, 2015 and 10.2% less than the approved average January 1, 2015 advisory pure premium rate of $2.74.

The Governing Committee’s decision was based on the WCIRB Actuarial Committee’s analysis of insurer loss and loss adjustment experience as of December 31, 2014, which was reviewed at public meetings of the Actuarial Committee held on March 18, 2015 and March 30, 2015.

While loss adjustment expenses continue to emerge at levels higher than expected, those higher costs are more than offset by better than projected loss experience. The primary drivers of the indicated reduction in advisory pure premium rates are:

  • Significant improvement in medical loss development since the WCIRB’s amended January 1, 2015 Pure Premium Rate Filing, which decreases the estimates of ultimate historical accident year loss ratios and the resultant future year medical cost projections.
  • Continued decline in the average cost of indemnity and medical on indemnity claims—particularly in the 2014 accident year. For the second consecutive year following the implementation of SB 863, medical severities declined by more than 4%.
  • Significant improvement in accident year 2014 experience, in large part driven by lower than expected severity growth.

The WCIRB anticipates submitting its filing to the CDI by April 6, 2015. The filing and all related documents will be available in the Publication and Filings section of the WCIRB website ( and the WCIRB will issue a Wire Story once the filing has been submitted.

Documents related to the Governing Committee meeting, including the agenda and materials displayed or distributed at the meeting, are available on the Governing Committee page of the WCIRB website (

Related Information

April 1, 2015 Governing Committee Agenda

March 30, 2015 Actuarial Committee Agenda and Presentations

March 18, 2015 Actuarial Committee Agenda and Presentations

April 1, 2015