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WCIRB Formally Recommendes a 29.6% Rate Increase
California workers' compensation rates are reviewed periodically by the Workers' Compensation Insurance Rating Bureau ("WCIRB"). The WCIRB performs a statistical review of premium/loss data, prepares a recommendation for rate increases or decreases and then forwards it to the Department of Insurance ("DOI") for its consideration. Regardless of what the WCIRB recommends, the DOI has complete autonomy to implement all, part or none of the recommendation.
On 8/11, the WCIRB formally recommended a 29.6% rate increase to be effective January 1, 2011. This development will likely receive a great deal of play in the media and some brokers may use it as a "scare tactic" to prospect for new business, however it is noteworthy that the WCIRB has recommended significant rate increases in each of the past several years and the DOI has chosen to largely disregard them.
While the DOI serves an industry regulatory and consumer advocacy function, it is also a political animal and as such, takes non-insurance factors into consideration when evaluating a WCIRB recommendation. Accordingly, such a dramatic rate increase in 2011 is not likely for the following two reasons:
- This is "primetime" season for California's upcoming gubernatorial election
- The California economy can not sustain a setback of this magnitude and the state legislature would deem this as "political suicide".
With the above in mind, injured worker benefits are increasing significantly next year and rates are now approximately 60% of what they were in 2004. There is likely to be some rate increase, however it is quite doubtful it will be anywhere near the 29.6% WCIRB recommendation. If we were to use our "crystal ball", we anticipate an increase in the range of 10 to 15%.
Please see the attached link to the WCIRB press release. Please let us know if you have any questions or if additional information would be helpful.
As always, your continuing confidence and loyalty is greatly appreciated.
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Do you have a Recession Plan In Place...?
Strategic business planning has never been more important as businesses re-group and re-assess where they are in the latest "new-economy"; what is your "Recession Recovery" plan? RCI's business advisor asks the key questions business owners should be asking themselves, and uses his 38 years experience to reach out to RCI clients.
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Resetting Your Power Button
In challenging times, people often find it difficult to maintain a positive outlook and they begin questioning their own motivation. Motivation is a very personal
emotion that can not be taught - it can only be sustained by our priorities and our desire to feel good about ourselves and those around us.
I've seen a number of articles that offer advice on motivation and how you can "find" it. I usually make it partway through the article and then lose interest because it's either too philosophical or not realistic. In other words, I can't seem to connect with the concept or the author.
I recent came across the short article in the link below and found it was unique because it not only offers practical advice but also provides examples that we as business people, can often relate to. I hope that this article provides you with meaningful insight as to how you can better use your energy, interests and time to achieve success and gratification...
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Come have some fun in the sun and...SEE US!
This year RCI Brokers staff will be working both days, Sep 18th & 19th, at the 15th annual Lafayette Art & Wine festival selling drink tickets!
Our booth will be located on the North side of Mt. Diablo Blvd, right in front of Swad Restaurant and Panda Express!
It should be a great weekend, and an AWESOME event! With over 250 fine arts and crafts booths, both Wine and Beer being poured, and a designated "Kids Zone" there really is SOMETHNG fun for the whole family!
We really hope to see of YOU there!
For additional information please click here |
