California Construction Trucking Association (CCTA)

Workers’ Compensation insurance rates will be going up January 1, but, if a decision from Insurance Commissioner Dave Jones is accepted by insurance companies, the rate increase will be a modest .07 percent of payroll.

In California’s complicated Workers’ Comp rate structure, the Workers’ Compensation Insurance Rating Bureau of California’s (WCIRB) proposes a “Pure Premium Rate Filing,” and the insurance commissioner then issues an “advisory pure premium” rate.  This year the rate suggested was an average $2.56 per $100 of payroll, about seven cents higher than the industry average rate of $2.49 per $100 of payroll as of November 9, 2012.

The State Compensation Insurance Fund (SCIF) board of directors this morning authorized the quasi-governmental carrier to revise the tiered rating plan it has on file with the California Department of Insurance to make a 7% rate cut for 2013 policies. Officials say it's expected that this rate cut will take effect late in the first quarter of 2013, which means the Jan. 1 renewals will miss out on the decrease.

California employers have a new workers’ compensation Policyholder Ombudsman. Ms. Addie Wong took over the Ombudsman position this spring and has begun developing an outreach program aimed at raising awareness of the Ombudsman office and the services she offers to California employers.

July 1 the Workers’ Compensation Insurance Rating Bureau (WCIRB) will present its case for a 4.5 percent pure premium hike to State Insurance Commissioner Dave Jones.  The commissioner does not set insurance rates, but during the past year Jones has established a new pure premium benchmarking system that the WCIRB is following for the July 1 hearing.

In the meantime, the amount of premiums collected in California has been steadily rising, with the marginal improvements in the state economy and slow improvement in the California job market. Higher rates for workers’ compensation insurance in California teamed up in 2011 to push written premiums to $10.8 billion before any deductible credits were applied. Net written premiums amounted to $7.9 billion, which is up $1.4 billion from the 2009 low point.

Dear SCIF Group 919 Clients and Manager:

On November 18, 2011, State Fund announced plans to disburse $50 million to qualifying policyholders in the form of a premium credit that is based on 2011 estimated annual premiums and will be applied during the 2012 policy year. The credit would be available to 2011 policyholders who:

*    Paid their premiums timely and kept their policy in good standing in 2011,
*    Renew their policy with State Fund in 2012 and continue to pay premiums timely and accurately, and
*    Finalize their final audit bill for 2011 within six months of expiration. 

Our Board of Directors has amended part of this declaration to eliminate the renewal requirement following discussions with California Department of Insurance (CDI). 

Dear Association Manager:

I’m writing today to share some important news about an upcoming restructuring at State Fund that will yield $350 million in annual savings and help manage the cost and availability of workers’ compensation insurance for all California employers.

We exist to serve all California employers as a fairly priced and open market for their workers’ compensation insurance needs.  While we have much to be proud of in this regard, there is more to be done.