A new and decreased rate for workers compensation insurance has been adopted in California, according to Insurance Commissioner Ricardo Lara.

The action lowers the annual benchmark rate from $1.41 to $1.38 per $100 of payroll for workers compensation insurance — representing a 2.1 percent decrease from last year.

The new rate will go into effect on Sept. 1, 2024.

Key factors for the rate adjustment include the continuing decrease in the number of medical services associated with each workers compensation claim and a continuing decline in the percentage of claims with permanent disability benefits.

The Workers’ Compensation Insurance Rating Bureau of California’s (WCIRB) Sept. 1, 2024 Pure Premium Rate Filing includes COVID-19 experience in the portion of the projection that is developed from accident year 2023.

Beginning with accident year 2023, COVID-19 experience will no longer be excluded from consideration when setting rates.

Commissioner Lara’s decision results in an average advisory pure premium rate that is below the $1.42 average rate proposed by the WCIRB in its filing with the California Department of Insurance.

The commissioner’s recommended rate is based on insurance companies’ cost data, trends and recommendations made by the department’s workers compensation experts.

The pure premium rate is only advisory, as the commissioner does not have statutory rate setting authority over workers compensation rates.

The average advisory pure premium rate level of $1.38 approved by the commissioner is about 21.1 percent lower than the industry-filed average pure premium rate of $1.75 as of Jan. 1, 2024.