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Last week, Insurance Commissioner Dave Jones approved Workers’ Compensation Insurance Rating Bureau’s (WCIRB) new advisory pure premium rates effectiveJanuary 1, 2012 that average $2.30 per $100 of payroll.
In addition to new advisory pure premium rates, the Insurance Commissioner approved the WCIRB's proposed changes to the California Workers' Compensation Uniform Statistical Reporting Plan – 1995 (USRP), the California Workers' Compensation Experience Rating Plan – 1995 (ERP) and theMiscellaneous Regulations for the Recording and Reporting of Data (Miscellaneous Regs) except for the change to Classification 3620(1), Boilermaking – plate steel – N.O.C., and the experience rating eligibility threshold which was modified to $23,300 based on the approved 2012 pure premium rates.
For detailed information, see WCIRB Bulletin 2011-09 available in the Regulatory Filings section of the WCIRB website.
The 2012 pure premium rates reflect the projected cost of medical and indemnity losses and loss adjustment expenses expected to be incurred on policies incepting on or after January 1, 2012. Pure premium rates do not include provisions for other insurer expenses such as commissions, general business expenses, taxes, etc.
2012 Experience Modifications and Experience Rating Form
Beginning January 1, 2012, “Primary Credibility” and “Excess Credibility” factors will be substituted for “B” and “W” values in the experience rating formula and there will be significant changes to the appearance of the experience rating form and the manner in which the experience and rating computation are shown. The intent of these changes is to help policyholders better understand the experience rating formula and the data used in experience rating. The use of “Primary Credibility” and “Excess Credibility” in lieu of “B and W” values will not significantly impact 2012 experience modifications. These changes were proposed as part of the WCIRB’s January 1, 2011 Pure Premium Rate Filing and were approved by then Insurance Commissioner Poizner on November 18, 2010.
For information about experience rating and the changes to the experience rating form, visit the California's Experience Rating System educational module in the Helpful Information section of the WCIRB website.
The WCIRB anticipates commencing the issuance of January 1, 2012 experience modifications under the new formula and worksheet within the next week. We anticipate that the majority of the first quarter 2012 experience modifications will be issued by November 28, 2011.
The January 1, 2012 versions of the USRP, ERP and Miscellaneous Regs are being updated and will be available on the WCIRB website soon. Until these publications are available, please refer to the new WCIRB Quick Reference Guide 2012 for information about the approved changes. The Guide can be printed or downloaded from the WCIRB home page.
The Insurance Commissioner's Decision, the WCIRB's complete filing and all related documents such as the approved pure premium rates and expected loss rates may be viewed and downloaded from the Regulatory Filings section of the WCIRB website.