Insurance Commissioner Okays Benchmark Rate Decrease for California Employers

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California’s insurance commissioner has approved a recommendation to reduce average baseline rates on workers’ compensation policies by 7.8% at the mid-year mark. The mid-year reduction to the baseline rate is largely the result of reforms that were introduced in 2013 that have sped up the settlement process for claims (including many long-term claims), in addition to reducing medical costs. Also, because of these reforms the cost of adjusting workers’ comp claims in California has dropped over the past few years. Insurance carriers use the benchmark rate – also known as the pure premium rate – as a starting point for…
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Agency Recommends Further Rate Cuts for California Employers

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The reforms that were ushered in by the state Legislature in 2012 seem to be paying off, with the Workers’ Compensation Insurance Rating Bureau of California recommending that benchmark rates be cut by an average of 5% in July. The Rating Bureau has forwarded its recommendation for a mid-year rate cut to the California Department of Insurance, and the insurance commissioner will hold a hearing on the filing likely in May. The filing was made in reaction to lower-than-expected medical cost development, as well as the cost of indemnity benefits per claim. The Rating Bureau is recommending that the average…
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Small Group Grandmothered Plans to Disappear

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As I write this, I’m reminded of the holiday tune, “Grandma Got Run Over By a Reindeer”. Obviously the songwriter had no idea how fitting it would be this particular December as Grandmothered Medical Plans expire in California, but it does seem like an appropriate theme song. To be sure, this will be a renewal season for the ages. As we prepare for the flurry of activity, where upwards of 70% of all small groups across the state will be renewing at the very same time, we thought we’d share some general information for small groups with Grandmothered plans: •…
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Bureau Recommends 12.2% Rate Cut for 2016

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California’s workers’ compensation statistical agency will recommend that benchmark rates be reduced by an average of 12.2% for policies incepting at the start of next year. The rate filing is actually for a 0.8% reduction, but that comes after benchmark rates were cut 10.2% on July 1, so that’s why the average rate reduction for January policies is higher. The Workers’ Compensation Insurance Rating Bureau will file the recommendation with the state insurance commissioner, who has the final word on rates in California. He can either choose to approve or reject the rate, and if he does the latter he…
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