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WCIRB and You

WCIRB and You

It is an entity that is part of the insurance portfolio of every employer in California: the Workers Compensation Insurance Rating Bureau (WCIRB).  You may have heard about WCIRB from your broker, or the WCIRB may have been in contact with your business. How much do you really know about this agency? What They Are Every state has a way of assigning payroll classes, etc., much like the WCIRB. For the purposes of this article we are going to discuss the California WCIRB. The WCIRB is a nonprofit association comprised of all companies licensed for workers compensation transactions in the State of California.  The WCIRB works with the California Department of Insurance to perform many Workers Compensation Insurance related functions including: Using statistical and actuarial data to determine pure premium rates. Administering Workers Compensation regulations. Assist policyholders with employee classification. Produce and distribute experience modification factor worksheets. Reviews policy forms and endorsements. Advises the Cal-OSHA Targeted Inspection Program. WCIRB serves workers compensation policyholders in many different ways, but the two most important ones for business owners are experience modification factors and employee classification codes.  Here is how those work: The Mod Factor One way to modify pure premium on a work comp policy is through an experience modification factor. This factor is determined through a complicated mathematical process involving 5 years of claim data for a particular employer, including both frequency and severity of claims. Depending on frequency (number of claims) and severity (claims amount paid out) a modification factor of anywhere from 60% to 300% may be applied to the pure premium to determine the total cost of...