CA WCIRB Webinar
The following is a great live CA WCIRB webinar that was typed in as it happened.
Please excuse any typos, weird language as I am typing this live as I hear it. Thanks for the understanding.

Check back often as this blog will keep updating, if things go as planned.I will try to input info that will not be in the written report provided by WCIRB.
There were a few technical difficulties (as in 99.9%of webinars) with the sound. Everything is A-OK now.
The Agenda for today is:
- Employer Costs
- Cost Distributions
- Cost Drivers
- Senate Bill 863
- Insurer Results
Employer Costs –

Total Premium estimated for 2014 16.3 Billion, steady double digit increase since 2006
Most of the increased Employer Cost Factors are from increases in what premium carriers charge employers
Average charged payrolls are the same as the 1970’s(?) – $2.97 per $100 of payroll
California has always had a higher charged rates when compared to the national average.
Published rate (average) are extremely high for Transportation and Utilities – almost $10 per $100. That is normal for most states- Transportation is usually highest or almost the highest
Cost Distributions
Medical benefits – 37% of total comp payouts – very similar to most states.WCIRB actuaries say Permanent Disability benefits will increase sharply over the next few years.
The largest growth in medical payments – is medical payments made to employees
Cost Drivers
Accident rates are much lower than n the 1990’s with a high in 1991 of 5% of all employees filing a WC claim for indemnity – Frequency has fallen to under 2%- possibly due to CA becoming a service-oriented state
Indemnity claims frequency was highest in central California. Los Angeles area is starting to increase in the 2012 data.
As compared to NCCI data, since 2012, CA has had a much higher rate of claims reported.
As expected, California has much more Permanent Disability rate on indemnity claims = 47% There are actually six states higher than CA. South Carolina is a surprise state.
Indemnity claim severity has been flat for CA since 2005.
Medical costs increase on indemnity claims have increased by 500% since 1991. The recent medical costs have leveled off for the most part.
CA is highest on the Incurred Medical Benefits per indemnity claim except for Delaware and Alaska.
Allocated Loss Adjustment Expenses (ALAE) have actually increased since SB 863 as WCIRB had projected a 6% reduction. ALAE expenses actually grew 6 – 9% in 2013 – alarming.
Senate Bill 863 (SB 863)

Liens seem to be the only positive result so far when compared to the WCIRB’s forecasts. However, it is much too early to really have any full assessments of the involved factors.
Participant questions- Will the legal push-back on lien affect costs? Yes, but unknown effect,
Any surprises from SB 863? Basically, no reductions in SB 863 frictional costs which was the reason for enacting the bill.
Overall Outlook
CA has very high volatility on profitability, but still indicates some profitability.
Summary – I will cover this more in depth next week. (Slide 37)
Final Participant Questions – Does/will the Affordable Health Care Act affect CA WC? – Still studying the matter, supply and demand on health care access, workers may not try to shift a health claim to WC if they have health insurance instead of being uninsured – premature estimations
SB 863 question – Forecast on ALAE? Alarming increases instead of projected decreases. There are many possible changes that may decrease frictional costs.
Any info on Physician Dispensed Medication? WCIRB released report late last year on this subject.
Overall – a good webinar. This live CA WCIRB webinar went well and covered a very difficult subject.
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