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WCIRB GOVERNING COMMITTEE RECOMMENDS 24.4% INCREASE IN PURE PREMIUM RATES
EFFECTIVE JULY 1, 2009
San Francisco, CA March 18, 2008 - Earlier today, the WCIRB Governing
Committee directed the WCIRB to submit a filing to the California
Department of Insurance (CDI) recommending an approximate 24.4% increase in
pure premium rates (or "claims cost benchmark") effective July 1, 2009. The
Governing Committee made its decision based on a recommendation made by the
WCIRB Actuarial Committee at its March 16, 2009 meeting.
The recommendation is based on two principal components. First, the WCIRB's
evaluation of December 31, 2008 loss experience produces an indicated
increase in the claims cost benchmark of 17.6%. This indicated increase is
primarily the result of increased medical costs. Second, the WCIRB's
analysis of anticipated cost increases stemming from three recent Workers'
Compensation Appeals Board decisions (?Ogilvie v. City and County of San
Francisco, Almaraz v. Environmental Recovery Services and Guzman v.
Milpitas Unified School District) indicates an additional increase of 5.8%.
Throughout its discussion, there was a general consensus among Governing
Committee members that 5.8% is a "minimum estimate" of the potential
additional costs arising from these decisions inasmuch as no cost data is
yet available. It is quite likely that the actual additional costs arising
from these decisions could be significantly higher.
If the full 24.4% increase is approved by the Insurance Commissioner, the
July 1, 2009 pure premium rates will still be, on average, 54% lower than
the approved pure premium rates in effect July 1, 2003.
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