California’s WCIRB XMods Resemble NCCI E-Mods Now
Are California’s WCIRB XMods changing to be more like NCCI‘s EMod system ? Will X-mods from CA’s WCIRB have a split-point increase similar to the NCCI’s E-mods? I received this question in my email over the weekend.
The changes to the EMod system are basically going to increase the primary loss part of the claim reserves in 2013 from $5,000 to $10,000. The split point will then increase to $13,000 in 2014 and then to $15,000 + some unknown inflation factor in 2015. Almost all the states have accepted the new primary loss (split point) increases.
There has been much debate whether or not there will be a negative impact on the overall NCCI ratings. NCCI has basically said no. In my opinion, we will know in 2016 after the overall effect of the primary loss (split point) increases. The split point analysis will definitely have a look-back characteristic.
CA’s rating bureau – the WCIRB has said up until today there is no such split point increase on the near horizon. A few years ago, I wrote this article on how the WCIRB is becoming more similar to the NCCI each year. Does this mean the WCIRB will follow suit?
I read over the WCIRB’s main website. I saw no articles on their main page that would indicate the split point is increasing. The WCIRB currently differs with the NCCI on the split points. The NCCI is at 5,000. The WCIRB’s maximum primary loss (split point) is currently $7,000.
The WCIRB will likely have to change the split points eventually. A reporter that I spoke with last week from CA seemed to have a wait and see attitude on any upcoming WCIRB changes.
The bottom line is whether you are in CA or in any state, your company’s safety and risk management are going to be very worthwhile investments. The WC accident that never happened is the best company budgeting technique. This technique will become even more prevalent as the rating bureaus change the rules.
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