WCIRB Pure Premium Rates Not The Same As Workers Comp Insurance Rates (Usually)
The WCIRB pure premium rates generated a few calls over the last two weeks. Insurance companies file their own loss cost multipliers or LCM’s that deviate from those rates.
The Workers Compensation Insurance Rating Bureau is the rate bureau for specifically California.
The insurance carriers can increase or decrease their rates from the pure premium rates. They are also referred to as advisory rates.
A definition of advisory pure premium rates by the WCIRB: (See this online PDF File for a Rate Filing Example. )
Pure premium rates, which reflect loss costs including loss adjustment expenses per unit of exposure, are only advisory and insurers are not required to use either the proposed or the approved pure premium rates in establishing the rates it will charge.
The rates have to be approved by the Insurance Commissioner at a hearing. The Commissioner has rejected any pure premium rate increases in the past.
The one great development is that companies are researching their policy information. Reading your policy is the first step in reducing your Workers Compensation premiums.
Please note that I am only referring to the rates. I am not referring to the Classification Codes. If your company has what you feel are inaccurate classification codes, those may be disputed. And where do you find the procedure? Yes, that is right – in your Workers Compensation policy.
The Insurance Commissioners in all states require that it be in every policy. No, really – it exists inside your policy.
The pure premium rates are reviewed for changes constantly by the WCIRB’s Actuarial and other committees. The bureau publishes any rate change recommendations on their website in various reports. The reports are usually produced on a semi-annual basis.
You may want to surf their website for more subjects beyond the WCIRB pure premium rates.
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