At Warren G. Bender Co. (WGBCO) we see our responsibility?to our clients and associates to continually be a resource for contemporary and accurate information; Information that reflects the ?current? of the global industry that affects your financing of ?risk? and the sometimes challenging issues influencing the short and long term economics of that mechanism.
Let us ponder on the ?rudderless ship? as referenced above which we choose as a synonym of the Workers? Compensation industry in California (and many other states throughout our nation).
Let us also reflect on the FAVORABLE trend with regards to consumer pricing that followed the historic reforms of 2004 (Please see below regarding the WCIRB/circa 4/12/12 Report on ?Average Charged Rate?):
Unfortunately, in the spirit of ?all good things must come to an end?, let us now reflect on the ?Combined Loss and Expense Ratios? (again, WCIRB/circa 4/12/12).
Unfortunately, it has been the insurance industry?s tendency to not take gradual, incremental rate increases, as the CIRB and the California Department of Insurance have made advisory rate increase recommendations over the last 18 months. (Can anybody spell ?leadership??) This reticence has short-term benefit to California Employers but typically results with a tsunami-effect of larger increases culminating when all the ?dark planets align?.
The CIRB will recommend, again, a 12.6% average pure premium rate increase that would be effective Jan. 1, 2013 for new and renewing policies. These rate increases must be approved or rejected by California?s Department of Insurance, which can only recommend that insurers consider rate increase or decreases. Yes, California is an ?Open Rating State?.
Last week, the rating bureau?s governing committee unanimously voted to authorize the rate filing.? It would raise the average advisory rate to $2.68 per $100 of payroll, up from $2.38 per $100.
Help is on the way?
Meanwhile, a workers? compensation reform bill set to be proposed in California would limit some companies? ability to self insure for workers? comp claims, and would allegedly increase total permanent disability benefits for workers by $720 million per year. SB 863 is complex and we suggest that you contact your WGBCO representative and we can forward to you several digestions regarding the same.
Will Workers? Compensation Insurance issues, either in California or beyond, ever stabilize or reach ?normalcy?? ?Probably not.? Any device that provides for the statutory distribution of benefits (in this case, regarding Worker Injury related) will be challenged, abused, politicized?but notwithstanding still remains one of the most progressive forms of assistance for the injured worker since the industrial revolution.
Again, WGBCO will provide you with straight up, accurate, timely information on this and many related topics.? The facts are the facts: they may elate you or frustrate you. Regardless, we will deliver the same and also make every effort to provide creative, appropriate solutions to help you navigate the choppy waters?.even when faced with a ?rudderless ship?.
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