NU Online News Service, April 8, 2:57 p.m. EDT

The Workers Compensation Insurance Rating Bureau of California's (WCIRB) Governing Committee has decided to submit an informational filing, rather than a rate filing, to the state insurance department in part to shift focus away from a hard number and toward the actual cost drivers in the workers' comp system.

Earlier this month, WCIRB's Actuarial Committee reported that the workers' compensation system continues to show "significant pure premium rate inadequacy."

In November 2010, former California Insurance Commissioner Steve Poizner rejected WCIRB's filing for a 27.7 percent increase in the state's workers' comp benchmark rate.

Adverse developments since then have added another 10-12 percentage points, meaning rates are now inadequate by nearly 40 percent, according to Jack Hannan, WCIRB communications director.

However, Hannan says WCIRB's Governing Committee decided against filing for a pure premium-rate increase for July 1. He notes that the committee does not want the conversation to focus on the 40 percent number. "That's not the point we wanted to get across," he says.

Rather, the committee wants the conversation among public-policy makers to be about the factors behind the upward pressure on costs and rates. For that reason, WCIRB will make an informational filing only.

Hannan says that new information requests by the department mean that any rate filing would not have been made for at least a few weeks anyway.

The next rate filing will be in August, for rates that would take effect on Jan. 1.

In rejecting the previous increase request, Poizner, then commissioner, said insurers are not using available tools to address cost drivers in the system, and added he would not approve an increase until they use those tools.

Mark Sektnan, president of the Association of California Insurance Companies (ACIC), says those tools place a "huge administrative burden" on insurers. "[Poizner] never seemed to understand that," he says.

Sektnan says Poizner used a "slight of hand" by not addressing cost drivers and then blaming it on insurers for not doing enough.

Regarding the current commissioner, Dave Jones, Sektnan says initial conversations have been held and "he seems open to working with us."

Special Reports /

Calif. WCIRB Opts For Informational Workers’ Comp Filing Only

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