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California workers’ compensation advisory rates are set to decrease 10.2% for policies issued on or after July 1, according to the California Workers’ Compensation Insurance Rating Bureau. The rating bureau requested this based on lower-than-expected medical losses and claim severity in the state.

Advisory pure premium rates for California employers will fall to $2.46 per $100 of payroll as of July 1, down from $2.74 per on this web $100 of payroll approved as of Jan. 1, Oakland, California-based WCIRB said in a statement Thursday. California Insurance Commissioner Dave Jones approved the rate cut on May 7, according to documents posted online by WCIRB.

The rating bureau requested in April that Mr. Jones approve the rate decrease based on declining medical severity for California workers comp claims and better-than-projected workers comp indemnity claim severity in 2013 and 2014.

Medical severity for California workers comp claims declined more than 4% per year in 2013 and 2014 following the passage of state workers comp reforms in 2012 while claim severity increased 5.4% in 2014, less than the 9.6% increase in indemnity severity that WCIRB originally had projected for that year, according to actuarial data posted online by the bureau.

Under state law, the insurance commissioner can only make rate recommendations. However, most insurers typically make changes in line with such recommendations. His decision to recommend a mid-year cut is uncommon, as the commissioner typically does so just once a year for policies that renew after Jan. 1, however, Jones noted that the change was possible because of data showing that medical costs for caring for injured workers have decreased recently.


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