Insurance Commissioner Poizner Rejects WCIRB's 16 Percent Increase in Claims Cost Benchmark

Rejecting the Workers Compensation Insurance Rating Bureau's (WCIRB) call for a 16 percent increase in the benchmark for determining workers compensation costs, Insurance Commissioner Steve Poizner accepted a more moderate 5 percent increase to reflect higher medical and claims adjustment costs to the system.

"Last year, experts predicted that loss adjustment expenses would increase dramatically. They did not," said Commissioner Poizner. "This year, experts have predicted accelerating increases in medical costs. Given the accuracy of past forecasts, I will wait for clear and compelling data confirming such increases before significantly increasing the Workers Compensation Claims Cost Benchmark."

In an effort to more accurately define the estimated change in claim costs that develop in the workers' compensation system, the "Pure Premium Advisory Rate" has been renamed the "Workers Compensation Claims Cost Benchmark." This term will be used in the future as it more accurately describes its role in the workers comp pricing system.

For the rest of the story, visit the California Department of Insurance (www.insurance.ca.gov)