The article below appeared in “Worker’s Compensation Executive” Newsletter that I receive and its worth passing on to all California Contractors who are feeling the pinch from recent rate increases.
Gigantic Rate Cut For 7/1 announced:
The Workers’ Compensation Insurance Rating Bureau’s governing committee just voted to seek a 10.2% cut in California’s pure premium rates. It will be effective for policies that incept or renew on or after July 1st. The motion passed on a 10-1 vote. The recommended cut would have been even larger if not for persistently high frictional costs in the claims administration process.
The Bureau is a private organization financially supported by insurance carriers.
What Commissioner Jones will do with the Bureau’s rate recommendations remains to be seen, although it is pretty hard to imagine this Commissioner turning down a rate decrease. Additionally, it is unclear whether carriers will do with the Bureau’s new rate recommendations, which are advisory only. During the actuarial review of the data several carrier representatives expressed concerns about using such green data to set new rates and wondered if the projected savings would hold.
Interestingly, many carriers have filed increased rates in the last couple of weeks, some of them set to become effective in July and September. Compline says it’s set to email another rate filing update outline carrier’s recent filings tomorrow morning.
Based on how some of the carriers are responding (skeptical of lowering rates)it becomes even more crucial that CA contractors work with a broker who has multiple carriers appointments to properly shop the market. The coming year looks to be bringing a significant shake up in who has the best rates for contractors.