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NEW RULE FOR 2016 WCIRB - EXPERIENCE MODIFICATION

The WCIRB submitted its January 1, 2016 Regulatory Filing to the California Department of Insurance on June 26, 2015 proposing
changes to the California Workers’ Compensation Uniform Statistical Reporting Plan —1995 (Uniform Statistical Reporting Plan) and
the California Workers’ Compensation Experience Rating Plan —1995 (Experience Rating Plan). Most of the amendments approved by
the Insurance Commissioner are effective January 1, 2016, but some are effective January 1, 2017.
For 2016, the Experience Rating Plan will use expected loss rates rather than advisory pure premium rates to determine eligibility for an
experience modification
. This change allows the WCIRB to begin issuing January 2016 experience modifications months sooner than
previously possible.
For 2017, the Experience Rating Plan permits debit experience modifications, in specified circumstances, to be issued excluding the
unaudited payroll for policyholders who are uncooperative at the time of a final audit. The 2017 Experience Rating Plan also replaces
the fixed $7,000 primary and excess loss split point with a variable split point that changes based on the size of the employer.
This
change enhances the accuracy of the experience rating formula, especially for smaller employers, reduces volatility and provides
flexibility for simplifying the experience rating formula in future years.
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