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| | California's State Compensation Insurance Fund Files For 9% Increase In Workers' Compensation Premiums
By Lonce LaMon - February 8, 2015
Last week, the State Compensation Insurance Fund of California filed for a 9% increase in collectible premium that will apply to new and renewal workers’ compensation policies effective on or after April 1, 2015.
Although the rate plan is designed to generate an overall 9% increase in collectable premium, the impact to individual policies will vary. Details of the rate filing include:
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Adoption of the Workers’ Compensation Insurance Rating Bureau’s pure premium recommendations and classification relativities for base rates.
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An approximate 5% increase to tiers A and B.
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The elimination of the group insurance discount.
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A 25% increase in minimum premiums.
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A 6.5% and 4.8% increase to the Los Angeles County and Southern California Area territory factors, respectively.
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Schedule rating threshold will move from $10,000 in base premium to $25,000.
There are several reasons for this rate increase. The latest reports from the Workers’ Compensation Insurance Rating Bureau (WCIRB) show that the rate of California workers filing lost-time workers’ compensation claims is at its highest level in 10 years. Unlike the rest of the country where claims frequency is on a downward trend, updated research by the WCIRB shows the rate of claims in California rose 0.9% in the first nine months of 2014 and the trend is driven by the experience in Southern California.
In 2013, State Fund introduced a new tiered rating plan that has greatly improved its ability to price individual risks and serve more California employers. Part of this rate plan also reflects an adjustment to the pricing model, which will continue to evolve over time.
Because State Compensation Insurance Fund is a vital provider of workers’ compensation insurance in California, it asserts it is committed to maintaining its financial strength and open door policy of serving California’s businesses across all industries.
In addition to its tiered pricing structure, State Fund continues to offer schedule rating, claims-free credit, and premium discounts to underwrite individual accounts.
Information extracted from Press Release, February 6th 2015.
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