he Workers Compensation Insurance Rating Bureau, an industry-supported advisory group, plans to recommend a 16 percent rate increase for new and renewing workers' compensation policies effective Jan. 1, the group said late Wednesday.

Possible increased disability payments to injured workers, now under consideration in Sacramento, could boost the potential increase to as much as 19.7 percent.

The San Francisco-based WCIRB, which makes recommendations about "pure" premium rates that the state Department of Insurance uses for guidance, said Aug. 13 that its governing committee had authorized the filing of a 16 percent recommendation for January rates. About 10.8 percent of the increase is due to increased medical costs, 2.8 percent due to increased loss-adjustment expenses, and 1.8 percent to other factors.

Additionally, if proposed changes to the permanent disability rating schedule are adopted by the state, pure premium rates could jump another 3.7 percent, for a total increase of nearly 20 percent. And that 3.7 percent increase would also affect "the unexpired portion" of workers' compensation policies for the remainder of 2008.

The filing will be submitted to the California Department of Insurance "on or around" Aug. 15.

Increased disability payments are being considered by the state Division of Workers' Compensation, but controversy is swirling around a proposal to permanently boost the amount that permanently injured workers are paid, according to a report last month in the Sacramento Business Journal, an affiliated publication. That battle, in turn, could affect the confirmation of Carrie Nevans, the state's top workers' compensation official, the Sacramento paper reported.

In late November, California Insurance Commissioner Steve Poizner recommended making no change in workers' compensation pure premium rates for January 2007, citing a continuing pattern of falling costs and skyrocketing profits for insurers since early 2003. WCIRB had recommended a 5.2 percent increase for last January, its first recommended increase since mid-2003.

The state's insurance commissioner typically issues a premium advisory rate twice a year, in July and January, DOI officials noted last November. While many insurers use it as a benchmark, they are not required to follow the commissioner's recommendations. Actual rates, as filed with the Department of Insurance, had fallen by 55 percent since January 2003, the department said late last year, and insurers' costs had plummeted 70 percent.

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