Bureau To Recommend 12.6% Average Rate Increase

Workers’ Comp Executive

Wednesday, August 15, 2012

Flash Report

WCIRB To Recommend 12.6% Average Increase In Pure Premium Rates

The Workers’ Compensation Insurance Rating Bureau’s Governing Committee just completed its deliberations and agreed to seek a 12.6% increase in the advisory pure premium rates for Jan. 1, 2013 new and renewal policies. The decision represents a 10.3% increase from the filing the Bureau made in April for July 1 policies, and an 11.2% increase over what Insurance Commissioner Dave Jones approved three months ago.

The Bureau’s filing will be for an average rate of $2.68 per $100 of payroll, compared to an industry average filed rate of $2.38. Following the earlier hikes, employers with January 1 renewals will see rates that on average are 18% higher.

Driving the deterioration are a number of the usual culprits, such as increased loss development of 3 points and a more pessimistic wage forecast that added another half a point of deterioration. But the increase also represents changes in methodologies to account for the growing medical costs from older claims and a revision to the trending projections for indemnity and medical loss trends. All toldthe older claims are boosting the indication by 2 points, while the trending changes add another 4 points.

The filing does not include any impact from the potential workers’ comp reforms that are currently under discussion. The Bureau will begin pricing the primary components of the reform package, including the changes in benefit levels, potential elimination of the future earning capacity modifier, as well as cuts to other cost driver. The Bureau will also revisit the filing early next month when it reviews another quarter of experience. The sense at the meeting was that the June quarter will likely push the indication up, but there was no consensus on the likely amount. “I’m not expecting a 5 point swing either way,” notes WCIRB chief actuary Dave Bellusci.

A formal filing is planned for the week of August 20.

Safety Matters: Talking points for safety meetings

According to the Occupational Safety and Health Administration (OSHA), one of the most effective ways to promote a safe working environment is to get involved in company safety meetings. Since safety is our top priority, we’ve gathered some tips to help you make the most out of our company safety meetings.

Why Safety Meetings

These informal, brief meetings allow your employees the opportunity to stay up to date on potential workplace hazards and safe workplace practices, such as machinery use, tool handling, equipment use, and safety-minded attitudes — basically anything that may contribute to accidents or illnesses in your workplace.

Meeting Basics

• Attending safety meetings should be mandatory. Be aware of what days you hold meetings, and have your employees plan accordingly.
• Always have employees sign a safety meeting log – record keeping is an important part of your safety and compliance program.
• Have employees be active participants. Some of the best safety ideas come from workers because they often know best what and where the dangers are.
• During safety meetings, if your employees have something to add, encourage them to speak up.
• Make part of the meeting an open forum and ask employees if they’ve noticed any activity that could have been a safety violation, i.e. spills not being cleaned up properly or someone didn’t follow lockout/tagout procedures. Solicit feedback so you can cover the topic at a future safety meeting, and everyone can benefit.
• If employees already know the topic of the day, ask them not to tune out, but to add valuable information they may have to the conversation.
• If one of your employees has an idea for a safety topic, chances are others will find it of interest too. Encourage your employees to share the details with their supervisor or the safety committee.
• Encourage employees to ask questions about safety, like how to lift safely or read a material safety data sheet (MSDS). There are no dumb questions when it comes to safety.
• Create a safety bulletin board or empower your human resources representative to always have safety information accessible to your employees.
• Recommend that your employees nominate someone within your organization who exemplifies safety and then recognize that person in your next safety meeting. This can serve as an incentive to other employees to increase their safety habits.