This was a week when we heard some grumbling and rumbling at the Workers' Compensation Insurance Rating Bureau.

Comp was reformed in 2013. Rates should stay flat or go down, right?

Well.....

It may not actually work that way.

We'll know more soon, as the WCIRB's Governing Committee is set to meet on Sept. 11. The Governing Committee will be considering data from the WCIRB Actuarial Committee regarding expense and loss information as of June 30.

According to a WCIRB press release:

"The June 30, 2013 experience, which was reviewed today by the WCIRB Actuarial Committee, showed significant adverse medical loss development and increasing indemnity claim frequency relative to the March 31, 2013 experience that was presented to the Governing Committee on Aug. 7, 2013. Based on this deterioration, the Governing Committee will reconsider the average advisory pure premium rate of $2.62 per $100 that was indicated based on March 31, 2013 experience."

It appears that the WCIRB may now be considering a rate increase recommendation that would be higher than the rate increase contemplated in August 2012.

The Governing Committee will make decisions about a rate filing. The drill goes like this: WCIRB recommends rates in a filing, and the filing is considered by the California insurance commissioner. But whatever the rate filing and whatever the decision of the California Department of Insurance, comp carriers will ultimately set their own rates.

As of the date of this post, it does not appear that the WCIRB has posted the June 30, 2013 experience report online. Nevertheless, here is a link to the WCIRB "Summaries of Insurer Experience" page.

If there has been some detectable increase in workers' comp costs and in "claim frequency" (i.e., how many claims are being filed?), do those statistics actually reflect what is likely to be the case as the impact of the Senate Bill 863 reforms take hold?

After all, measures to tighten up on medical provider network usage and the establishment of Independent Medical review of treatment denials were touted as measures that would save significant monies. Moreover, it was contemplated that the transition to a Resource-Based Relative Value Scale methodology to compensate doctors would not become a significant driver of increased costs.

The RBRVS issue is still contentious, with unhappy doctors and concerned employers and insurers still weighing in on how RBRVS reform will affect worker access to treatment and how much the reform will actually cost.

But isn't it a bit early to start raising rates based on cost data that principally are reflective of patterns under the old law?

This is an issue that will likely be explored at any rate hearing held later this year.

Meanwhile, here is a WCIRB study on "Impact of Senate Bill 363 on Loss Development Patterns."