California’s WCIRB Says 30% Increase Appropriate
California’s WCIRB has recommended a 30% increase in Workers Comp pure premium rates. I was interviewed by The Insurance Journal on my opinion of the heavy increase and the possible effects.
My response was that the 30% increase could have easily been 50%. Why? The (WCIRB) Workers Compensation Insurance Rating Bureau, Actuarial Committee has recommended numerous increases over the last few years These have all been turned away by Insurance Commissioner Poizner.
One has to wonder if the denials of all the increases as a precursor to his gubernatorial aspirations. I am not sure if that was the Insurance Commissioner’s motivation.
The WCIRB could not have been wrong that often. Is the 30% a recommendation due to a cumulative affect or is this a one shot recommendation to pull the pure premium rates back in line with their old forecasts and recommendations?
The spiraling costs of medical treatment is very likely the main driver variable behind the recommended sharp increases. If the 30% increase is approved, will the WCIRB be back at the table recommending even more increases the next time?
In my next post, I will graph the true pure premium rate recommendations versus what was actually approved each time over the last few years.
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