Hansen Insurance Agency

Employers hoping to escape a 2013 rate hike thanks to the just passed workers' comp reforms are getting a jolt of increase reality anyway. The Workers' Compensation Insurance Rating Bureau's actuarial committee just completed its review and will recommend a decrease of only one point in the Bureau's annual pure premium rate filing.

In other words the Bureau will seek an increase of approximately 11.5% over the currently filed rates rather than 12.6% as filed. This is subject to approval by its Governing Committee next week. Insurance Commissioner Dave Jones is slated to review the filing at a hearing later this month.

The Bureau's updated rate filing -- if one is made -- would reflect not only the immediate impact of the workers' comp reforms contained in SB 863 that the Legislature passed last week, but also an additional quarter of claims experience. While the reforms are "expected" to reduce costs by approximately 3.1% for the 2013 policies, the additional claims deterioration steals back two points of the savings.

Overall the Bureau's latest estimate of savings from the reform is an immediate savings of 4.5% in 2013 and then ongoing savings of 1.4%. For the filing the Bureau essentially averages the expected reform savings for 2013 and 2014 as policies will be written throughout the year. Major portions of the reform proposal, such as its calls for new fee schedules and other potential savings, are still not priced.

Posted 6:54 PM

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