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5% Increase Enough for California’s Workers Comp System?


5% Increase To Pure Premium Rate Too Low

California Insurance Commissioner Steve Poizner approved a rather anemic 5% increase in pure premium rate for Jan 1, 2009. The California Workers Compensation Insurance Rating Bureau (WCIRB) had recommended a 16% increase. Is this dangerous territory to cut the increase in pure premium rates by 11% from what was recommended?

Graphics of hand holding arrow 5% Increase Rate


The reason for the 16% increase was due to the medical loss development. The percentage does seem to track what has occurred with the increased rates of medical treatment and the number of treatments.


The positive aspect of the 5% increase is that the rates will not increase dramatically for employers in what is a down economy. This will alleviate part of the budget crunch that companies now face. The 5% increase may reduce the volatility that would likely occur with a 16% rate increase.


The negative aspect of the smaller increase may be the 5% increase may not keep pace with the medical development. This could cause a “snowball effect”, as the next increases may have to be even larger to catch up to the medical development in California.


I had always thought that the recommended decrease in rates was too extensive over the last few years. Those sharp decreases may be catching up with the California Workers Compensation system.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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