The State of the States

State Workers’ Comp News

By: | January 27, 2014

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected].


California employers could see their workers’ comp rates rise by an average 6.7 percent if insurers adhere to the adopted advisory rates. Insurance Commissioner Dave Jones adopted a rate of $2.70 per $100 of employer payroll for workers’ comp rates, effective Jan. 1.

The amount is less than the state workers’ comp’s rating agency’s two proposals. The Workers’ Compensation Insurance Rating Bureau of California initially proposed an increase of 6.7 percent above the industry’s average filed rates as of July 1, 2013. The rating bureau later amended that amount to $2.75 per $100 of payroll, or 8.7 percent, above the industry’s average filed rates.

In proposing the additional 1.8 percent increase in pure premium rates in October, the WCIRB cited the increased costs of the new physician fee schedule adopted by the Division of Workers’ Compensation that was part of recent legislative reforms.

“Commissioner Jones, the WCIRB, and the public members’ actuary all agree that the overall impact of S.B. 863 continues to result in savings for the workers’ compensation system,” according to a statement on the insurance commission’s website. “The California Department of Insurance continues to observe that medical and indemnity losses are outpacing wage growth, and consequently, the average advisory pure premium will increase in 2014.”

The department noted that the commissioner’s decision is advisory only because California law allows insurers to set their own rates. “The commissioner’s advisory pure premium rate is not predictive of what an individual insurance company may charge its policyholders because the review of pure premium rates is just one component of insurance pricing.”


The workers’ comp market is improving in the state. However, employers may still see a rate hike in 2014.

NCCI is recommending a 2.3 percent increase in Georgia’s workers’ comp advisory rates despite an improvement in the combined ratio — from 118 percent in 2011 to 111 percent in 2012.  The Florida rate-making organization said in a presentation that medical claim severity rose 5 percent in 2011 from 2010 while claim frequency grew 4.5 percent.

The Georgia Insurance and Safety Fire Commission is considering the proposal, which would take effect in March.


The story in Louisiana is nearly the opposite of Georgia. Claim frequency declined 5.8 percent in 2011, NCCI said. The result is a proposed 5.1 percent decrease in rates.

The news in Louisiana is not all good, however. NCCI said average medical claim severity increased somewhat in 2012. Also, the combined ratio while down slightly was still 120.7 percent. The filing would take effect in May if approved by the state’s insurance department.