California Insurance Commissioner Ricardo Lara rejected for the third year in a row a proposed increase in the pure premium level for workers’ compensation.
Faced with two recommendations to raise the interest rate and one to lower it slightly, Lara divided the difference and ordered that the interest rate remain unchanged at $ 1.45 per $ 100 in the payroll.
WCIRB recommended that the commissioner adopt an advisory rate of $ 1.56 per $ 100 salary for insurance starting on or after September 1st. The recommended interest rate is a 7.6% increase compared to the interest rate adopted by the Commissioner last year.
CDI attorney Yvonne Hauscarriague recommended the commissioner set the advisory rate at $ 1.49 – including the covid-19 claims cost surcharge – based on an analysis by the department’s actuarial staff.
Mark Priven, vice president and principal of special projects for Bickmore Actuarial and consultant to public members of WCIRB’s Steering Committee, recommended a small reduction to $ 1.44.
Mr Lara said that all recommendations fall within the reasonable technical range. Referring to uncertain economic conditions, he said he thought it would be appropriate to keep the advisory rate unchanged.
“I have established that there are a number of issues in the journal that remain uncertain and justify further monitoring before an adjustment of the pure premium rates needs to be made,” Lara wrote in Friday’s decision.
The Commissioner also rejected a proposal to include a 0.008 cent surcharge to take into account the cost of covid-19 claims.
“Given the unpredictability of covid-19’s future impact on the occupational injury insurance system, and given the very modest indication, I do not think an extra charge for covid-19 is currently eligible,” said Lara.
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