WCRIB: Premiums and Losses Rise in First Quarter of 2010

Last Thursday, the Workers' Compensation Insurance Rating Bureau (WCIRB) of California issued its first quarter report on workers' compensation benefits, premiums and losses.

The conclusion?

California workers compensation premiums and losses continue to trend upward. Specifically, the report found that written premiums for the first quarter of this year (January 1 through March 31) were roughly $2.9 billion, up 12 percent from the first quarter of last year.

Breaking the numbers down, the WCRIB found:

• In terms of policies written and issued this year, employers across the state are now paying roughly $2.47 for every $100 of payroll. This represents a five percent rate increase from the same time last year.
• Over the course of the past three months, insurers spent nearly 73 cents on claims for every dollar of premiums they accumulated. This represents a five percent increase in loss ratio from the same time last year. 

Update: Public hearing scheduled for proposed 30% increase in work comp rates

The WCIRB made news several weeks ago when it recommended a 30 percent increase in the workers' compensation rates that insurance companies charge employers. 

Insurance Commissioner Steve Poizner can now either accept or reject the WCIRB's recommendation.

Similarly, California's 400 licensed workers' comp companies are also free to accept or reject the WCIRB's recommendations and establish their own rates. However, they typically use the Insurance Commissioner's recommendations as their primary benchmark.

Last November, Commissioner Poizner rejected the WCIRB's recommendation of a 22.8 percent increase and instead advised no increase in base rates. The rationale given by Poizner was that a large increase in base rates would create additional costs for employers and put further strain on an already weakened economy.

A public hearing on the matter has been scheduled for September 28.
 
Stay tuned for further updates on workers' compensation benefits/law from our San Diego firm ...

Related Resources:
  
• Workers' Comp Premium up 5% (Silicon Valley San Jose Business Journal)
• California Public Hearing Set for Proposed 30% Workers' Comp Rate Hike (Insurance News Net)