California Pure Premium Workers’ Compensation Rates Continue to Drop

 

Representing over 25% of the workers’ compensation premium in the country, California is the heaviest weight in the overall profitability of the national system.  Considered to be the most volatile state for many years, California rates became the highest in the country.  Below an Oregon study that comes out every two years on overall cost of the workers’ compensation system.

In 2014, #1 Most Expensive

- http://www.cbs.state.or.us/external/dir/wc_cost/files/report_summary.pdf

This recent drop in pure premium rate will now make it interesting to watch as more carriers see California as a growth state.  To me, this indicates a sign of more competition to come in a system that is more profitable then given credit for at present time.

I am also very intrigued by these comments made by the WCIRB:

“Despite these positive trends, the Filing cautioned that historically high levels of loss adjustment expenses, persistently high rates of indemnity claim frequency, an increasing number of independent medical review requests, a spike in lien filings in early 2015, and persistent increases in temporary disability duration require continued monitoring as they may drive increased costs in the future.”

Coincidentally, FAPEO and NAPEO also see Allocated Loss Adjustment Expenses for its members as as such has sponsored the following program at the Workers Compensation Institute (“WCI”).  Come visit Orlando this coming week to hear about it… Information regarding the panel and overall session below along with the WCIRB bulletin.

About the Program:

“Allocated Loss Adjustment Expense (ALAE) is a significant cost of any workers’ compensation claim. This session will delve into the different methods of allocating loss expense, nuances and hidden costs, and expected benchmarks. By attending this breakout session, attendees will have a better understanding of expectations and questions to be asked when negotiating claim adjudication services.”

Tuesday August 25′th, 2015

8:30 – 9:30 am
The Real Cost of a Workers’ Compensation Claim: ALAE *

Program Moderator: 
Abram Finkelstein
Founder and President
StaffLink Outsourcing, Inc.
Plantation, FL 

Moderator:
Daniel Harris
Senior Director of State Government Affairs
National Association of Professional Employer Organizations
Alexandria, VA

Brian S. Fischer, Attorney
In House Legal Counsel
SUNZ Insurance Company, Inc.
Sarasota, FL

Paul Hughes
Chief Executive Officer
Risk Transfer, Inc.
Orlando, FL

Henry Cabaniss
Executive Director
TriNet
Charlotte, NC

Look forward to seeing everyone in Orlando!  Actual Premium rate filing below -

-PRH

WCIRB Wire Alert

2016 Advisory Pure Premium Rate Filing Submitted to CDI 

Oakland, CA August 19, 2015 - Earlier today, the WCIRB submitted its January 1, 2016 Pure Premium Rate Filing (Filing) to the California Department of Insurance (CDI) proposing advisory pure premium rates that average $2.45 per $100 of payroll, which is 7.8% less than the corresponding industry average filed pure premium rate of $2.66 as of July 1, 2015, and 0.8% less than the average approved July 1, 2015 advisory pure premium rate of $2.47.

The proposed further reduction in the advisory pure premium rate level for January 1, 2016 follows a 10.2% reduction approved by the California Insurance Commissioner effective July 1, 2015. The primary drivers of the reduction include:

  • Medical losses continue to develop favorably
  • Recent severity growth continues to emerge below projections
  • Increases in projected wage growth in California due to economic expansion

Despite these positive trends, the Filing cautioned that historically high levels of loss adjustment expenses, persistently high rates of indemnity claim frequency, an increasing number of independent medical review requests, a spike in lien filings in early 2015, and persistent increases in temporary disability duration require continued monitoring as they may drive increased costs in the future. 

The Filing and all related documents, including a detailed executive summary highlighting the Filing’s major components, are available on the Regulatory and Pure Premium Rate Filings page of the WCIRB website (http://www.wcirb.com/).

The CDI will schedule a public hearing to consider the Filing. Once the Notice of Proposed Action and Notice of Public Hearing is issued, the WCIRB will post a copy on the Regulatory and Pure Premium Rate Filings page of the website.

For More Information

Regulatory and Pure Premium Rate Filings

Governing Committee Authorizes Filing (August 12, 2015)

College Athlete, Temp Worker Labor Board Cases Could Redefine Employee

U.S. regulators are poised to decide two closely watched cases that have the potential to reshape labor laws by allowing college football players to unionize and forcing companies to take more responsibility for contractors.

The National Labor Relations Board may decide the cases as soon as this week, and the prospect of change is already rankling university presidents and business leaders. One case concerns contract workers at a recycling facility who are trying to draw the owner into labor negotiations. The other would answer a petition from football players at Northwestern University seeking scholarship and medical benefits  

via College Athlete, Temp Worker Labor Board Cases Could Redefine Employee.

Court Decision May Impact Workers’ Comp Side Agreements in California

A recent court decision may have the potential to change the practice of side agreements in workers’ compensation policies California, a practice that some say often goes on under the regulatory radar.  Zurich American Insurance Co. and American Zurich Insurance Co. had such a side agreement with Los Angeles, Calif.-based Country Villa Service Corp. Sometimes also called “deductible agreements,” or “program agreements,” they can retroactively alter an existing policy.

via Court Decision May Impact Workers’ Comp Side Agreements in California.

The Evolution of Employment Practices Liability Insurance

It’s been interesting to watch the growth of employment practices liability insurance EPLI during more than 25 years of working in the specialty insurance industry.  Twenty years ago EPLI was rare in the United States and, even a decade ago, most companies didn’t buy it. Today, however, many firms have stand-alone EPLI coverage: 41 percent of those with more than 1,000 employees, 34 percent of those with 500 to 750, 23 percent of those with 200 to 500 employees, 32 percent of those with 50 to 200 employees, and about 20 percent having fewer than 50 employees, according to Advisen.

via The Evolution of Employment Practices Liability Insurance.

Contractor rules expand employer risks | Business Insurance

New Labor Department guidance on classifying workers as employees versus independent contractors is expected to increase litigation against employers. Experts recommend that firms, particularly those with a significant numbers of independent contractors, conduct an audit now to ensure they are classified properly under the Fair Labor Standards Act, though the expectation is that fewer workers will be classified as independent contractors.

via Contractor rules expand employer risks | Business Insurance.

Wage-and-hour, employment practices hybrid on the rise | Business Insurance

Combining wage-and-hour coverage with employment practices liability insurance is gaining marketplace acceptance and is expected to bolster the former’s popularity. Experts say about $100 million in capacity is available, with primary coverage being provided by XL Group P.L.C., Allied World Assurance Co. and Markel Corp. out of Bermuda, and by the Beazley Group P.L.C. in London. Other markets also are expressing interest in providing the coverage.

via Wage-and-hour, employment practices hybrid on the rise | Business Insurance.

Researcher says can hack GMs OnStar app, open vehicle, start engine | Reuters

Researcher says can hack GMs OnStar app, open vehicle, start engine | Reuters.

Cyber breach hits home appliances, cars and many other every day products that now use computer chips.  In the same manner as hackers target computers, other every-day products can be hacked into and altered.  In this case, a researcher has found a way to open and start Genral Motors vehicles through OnStar.

-PRH