The Worker’s Compensation Insurance Rating Bureau announced recently that it plans to submit a filing to the California Department of Insurance recommending a 23.7 percent increase in pure premium rates effective July 1.

Donna Eyman

Donna Eyman

Policies in force midyear most likely will not be affected until their annual renewal date.

The recommendation for the increase, according to the WCIRB, is based mainly on two factors — increased medical costs and Workers’ Compensation Appeals Board decisions relating to claims. Most of the increase is reportedly because of increased medical costs.

Insurance Commissioner Steve Poizner has requested that the WCIRB withdraw its request for an increase of 23.7 percent and re-evaluate a portion of the increase that was due to some the recent Almaraz and Ogilvie decisions by the Workers’ Compensation Appeals Board.

Poizner indicated that while increased medical treatment costs may be justified, information provided at the April hearing didn’t support the request for the high increase. He is also concerned about the quality of the data recently provided by the WCIRB and is reviewing its operations. It is important to note that Poizner and the state Department of Insurance have no authority to actually set workers’ compensation rates.

Business owners should be aware that the WCIRB recommended rate increases don’t directly translate into an increase for all businesses. The recommendations do, however, point to a possible end to the “soft market,” where rates have been on the decline for several years. Businesses in California are likely to see higher rates, but the extent of the increase is unknown, and insurance carriers will continue to file their own rates and scheduled credits.

— Donna Eyman represents Eyman Parker Insurance Brokers Inc. and James G. Parker Insurance Associates Inc.