1 / 20

Casualty Loss Reserve Seminar Workers Compensation Issues: California

Casualty Loss Reserve Seminar Workers Compensation Issues: California. Donald K. Rainey Milliman USA. California tumbles into the sea…. CA WC (Gross of Reins. & Deductibles) WCIRB Minus Industry Reported at 3/02. Root Causes Include …. Decreasing Frequency Drops Loss Trend Developments

moral
Download Presentation

Casualty Loss Reserve Seminar Workers Compensation Issues: California

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Casualty Loss Reserve SeminarWorkers CompensationIssues: California Donald K. Rainey Milliman USA

  2. California tumbles into the sea…

  3. CA WC (Gross of Reins. & Deductibles)WCIRB Minus Industry Reported at 3/02 Source: WCIRB

  4. Root Causes Include … • Decreasing Frequency Drops • Loss Trend Developments • Loss Development Trends • Increasing/High Loss Ratios

  5. CA WC – Frequency per On-Level EP @ 12/01 Trend since 1993 = -2.4% Source: WCIRB

  6. Frequency Drivers – Non Cumulative Injuries • 2/3 of Decline Due to: • Increased Cal/OSHA Enforcement • Shift to Service-Based Economy • Erosion of Statutory Benefits • Slower than Typical Economic Growth • Decline Should Slow Due to AB749 Source: WCIRB

  7. CA WC – Average Cost per Indemnity Claim Source: WCIRB

  8. Severity Drivers • Presumption of Treating Physician • Large Increases in Hospital Costs • Increased Medical Cost Containment Efforts • Mix of Claims Source: WCIRB

  9. CA WC Paid Indemnity LDFs Source: WCIRB

  10. CA WC Paid Medical LDFs Source: WCIRB

  11. CA WC Medical “Paid Loss Trend” Drivers DRAFT study (09/02) results: • Increasing % of Major Claim Counts • Change in Severity of Major Claims is not a Major Cause • Possible Reasons • Major claims immune to drivers of declining frequency. • Up-coding possible but not supported or refuted by study. Source: WCIRB

  12. CA WC Rate Level Index(1989 = 100%) Source: WCIRB

  13. CA WC – Changes in Advisory PP Source: WCIRB

  14. CA WC Pure Loss Ratios @ 6/02 Source: WCIRB

  15. CA WC Combined Ratios @ 6/02 Source: WCIRB

  16. Combined Ratios – CA vs. National Source: WCIRB & NCCI

  17. AB 749 – Benefit Increases From 2003 to 2006 • Max Total Weekly Benefit Increases (Escalates Thereafter) • Maximum PPD Benefits Increase at selected Rating Intervals • Scheduled Number of Weeks Increase for Permanent Disability Benefits (2004) • Benefit Minimums Increase (2003-4, 2006) • Aggregate Death and Life Pension Benefit Maximums Increase (2006) Source: WCIRB

  18. AB 749 – Structural Changes • Primary Treating Physician Presumption • Use of Generic Drugs • Outpatient and Pharmaceuticals Fees Schedules • Settlement of Vocational Rehabilitation Source: WCIRB

  19. AB 749 – Percentage Impact Source: WCIRB

  20. CA WC – Pending Legislation of Note • AB 1985 – Changes Basis for Rate Adequacy • Old: Solvency • New: Loss Cost Plus • SB 2093 – Security Deposits • Cash & Securities, not Surety Bonds • AB 2007 – CIGA fees • Keeps 2% (instead of 1%) through 2007 Source: CWCDAA

More Related