2011 CIGA Surcharge
The California Insurance Guarantee Association (CIGA) has announced that the approved CIGA surcharge for California workers’ compensation policies with 2011 effective dates will be 2.559 percent, up from 2.0 percent for 2010 policies.
As noted in the fifth paragraph of the attached letter, which CIGA sent to its members in July, the surcharge consists of an initial premium charge of 1.0 percent levied pursuant to California Insurance Code §1063.5 for the Workers’ Compensation Account, plus a special bond assessment of 1.559 percent levied pursuant to Insurance Code §1063.74 for payment of principal and interest on bonds issued for the Workers’ Compensation Bond Fund. If you have any questions regarding the CIGA surcharge, contact Richard Hurd at 818-844-4300.
CIGA letter click here
Other Assessment and Surcharge News
The Department of Industrial Relations has yet to release 2011 assessments & surcharges for the WC Administration Revolving Fund, WC Fraud Account, Uninsured Employers Benefits Trust Fund, the Subsequent Injuries Benefits Trust, and the Occupational Safety & Health Fund, which insurers will need to apply against insureds’ estimated annual assessable premium for policies with 2011 inception dates. At a meeting between DIR officials and employers last week, DIR chief financial officer Greg Edwards said the gross dollars assessed are expected to increase by about $2 million (or less than 1 percent) in 2011, but because total premium was down $1.1 billion last year, and self-insured indemnity payments, which are the basis for self-insured assessments, fell nearly $100 million, the state will need to increase the assessment factors and the amounts billed to individual employers will increase 9 to 10 percent.
CWCI is in regular contact with the program director at DIR, who expects to release the rates in the next few weeks. As always, as soon as the state releases the rates, CWCI will issue an Exec Memo to member company principal execs and designated underwriting execs, as well as a Bulletin to members and subscribers. We will also post an announcement on the home page of our website (www.cwci.org) with a link to a news release detailing the 2011 rates.