The WCIRB submits advisory pure premium rates to the California Department of Insurance (CDI) for approval. Insurer rates are usually derived from the advisory pure premium rates developed by the WCIRB and approved by the Insurance Commissioner. Advisory pure premium rates, expressed as a rate per $100 of payroll, are based upon loss and payroll data submitted to the WCIRB by all insurance companies. These rates reflect the amount of losses an insurer can expect to pay in benefits due to workplace injuries as well as the cost for adjusting and settling workers' compensation claims. Pure premium rates do not account for administrative and other overhead costs that an insurer will incur, and, consequently, an insurer's rates are typically higher than the pure premium rates.
Advisory pure premium rates are available in the Filings and Plans section.
Each insurance company develops its own set of workers' compensation insurance rates. These rates are used in determining what you actually pay for your workers' compensation insurance coverage (insurer rates) and are filed with the California Department of Insurance prior to use. In deriving its rates, an insurer may adopt the WCIRB's advisory pure premium rates as a starting point and add on factors to account for its administrative costs, or, alternatively, an insurer may develop its own rate structure, using its own statistical and actuarial forecasting methods. In either case, once an insurer's rates have been filed with the California Department of Insurance, they must be used on the insurer's policies in effect during the applicable period. The WCIRB does not have any authority over the rates that an insurer applies to a policy.
The California Department of Insurance website has a Workers’ Compensation Rate Comparison section that includes lists of insurer rates by classification code. To learn more and to view the lists, go to http://www.insurance.ca.gov/01-consumers/105-type/9-compare-prem/wc-rate/.
| Insurer Rates Include: |
Pure Premium Rates Include: |
|---|---|
| Claims/Losses | Claims/Losses |
| Loss Adjustment Expenses | Loss Adjustment Expenses |
| Commissions | |
| Acquisitions Expenses | |
| General Expenses | |
| Taxes | |
| Dividends | |
| Profit | |
| * Advisory pure premium rates are amended at least annually. For the current pure premium rates, visit the Filings and Plans section. | |
