U.S. states employ a variety of rate regulation mechanisms, including prior approval, modified prior approval, file and use, and use and file. Some states do not require explicit regulatory approval prior to insurers using new rates. This analysis is based on when rate filings are "disposed" by state regulators and does not take into account when those new rates became effective for new and renewal business. In some instances, a new rate may have been in effect prior to the month the related filing was approved by a regulator.
A 4.2% rate increase approved for State Compensation Insurance Fund during the fourth quarter of 2022 stands to bolster premiums at California's workers' compensation insurance writer of last resort by $43.3 million.
The increase, which took effect Feb. 1 for both new business and renewals, will impact nearly 95,000 policyholders in the Golden State.
California's insurance regulator signed off on 26 workers' comp rate increase requests during the last three months of 2022. Those rate hikes are expected to raise premiums across the industry by $55.7 million.
SAIF Corp. and Hawaii Employers' Mutual Insurance Co. Inc. received the second- and third-most impactful single rate hikes disposed during the last quarter of 2022.
A 5.5% rate increase in Oregon is expected to push SAIF's overall premiums up by $27.4 million. The new rate went into effect Jan. 1 for both new and renewal businesses and impacts more than 52,000 policyholders.
The 5.8% rate hike requested by Hawaii Employers' is expected to boost its overall premiums by $4.7 million. The rate change will take effect May 1 for both new business and renewals.
* Read an article about State Fund and the overall workers' compensation market.
* Download a template that analyzes rate changes for selected entities, state or type of insurance over a selected time period using interpretive charts and histogram.
WCF Mutual tops rate cut chart
At the other end of the spectrum, WCF Mutual Insurance Co. received regulatory approval for the most-impactful rate decrease during the period. A 9.2% rate cut in Utah is estimated to reduce the group's total premiums by $18.3 million. It will impact nearly 20,000 policyholders.
The Travelers Cos. Inc., the largest workers' comp insurer in the U.S., is expected to record the biggest aggregate negative premium impact from rate cuts approved in the fourth quarter of 2022. The insurer's premiums stand to decline $28.8 million due to 84 rate reductions disposed in the period.
