On October 19, 2015, California Insurance Commissioner, Dave Jones, approved new advisory pure premium rates for workers’ compensation insurance policies that renew January 1, 2016 or later. Because of this, California employers will need to carefully consider how these approved rates will impact their insurance budgets for the new policy year.

What can CA business owners expect now that new 2016 rates have been approved?

Keep in mind that pure premium rates are not necessarily what a carrier will charge a policyholder on January 1st.  A pure premium rate is simply the amount the Workers’ Compensation Insurance Rating Bureau of California (WCIRB) expects carriers’ to pay for claims, losses and loss adjustment expense based on the kind of work an employee does.  Pure premium rates do not contemplate the other things insurance companies need to pay, like salaries to underwriters, commissions to brokers or dividends to shareholders.

Average Rate Analysis

These changes could have a direct affect on the price policyholders pay for coverage.  Consider how the average rates* effective for January 1, 2016 compare to the prior policy period:

*Average rate calculation does not include per capita or per race rates (7707 – Firefighters – volunteers, 7722 – Police, Sheriffs – volunteers, or 8278 – Jockeys).

WorkCompare.com has added the WCIRB 1/1/2016 Approved Advisory Rates to our database so users can quickly illustrate how these changes will impact the price of a policy.  We provide this information to make it easier for brokers and agents to guide their clients to the best buying decisions possible when selecting coverage.

Potential Premium Savings

Rates for the majority of the 488 standard classifications are approved to DECREASE.  That means employers with these classes could pay less for a renewing policy than they did the prior year.  For example:

Potential Premium Increases

At the same time, rates for some classifications are approved to INCREASE.  Policyholders in this group could pay more compared to identical coverage last year.  For example:

DOWNLOAD rate comparison table

Whenever new rates are proposed or approved, WorkCompare.com publishes a list that shows how much the individual rates are changing.  Click below to download a table that compares pure premium rates in force 1-1-2015 to pure premium rates approved for 1-1-2016.

We provide this information because policyholders are concerned with budgets, specifically the difference between last year’s premium and the coming year’s renewal pricing. And, we encourage our users to contact their policyholders and provide the specific details of how their exact rates are changing, up or down.

More Information

A WorkCompare.com pre-quote estimate will help you quickly analyze and compare pricing for 100+ California admitted workers’ compensation companies.

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