California Insurance Commissioner Ricardo Lara adopted a new workers’ compensation advisory pure premium rate of $1.65 per $100 of payroll, raising the benchmark by 6.6% from the 2025 approved rate, according to Beinsure.
The decision aims to preserve business access to workers’ compensation insurance as cost pressure builds across California’s system.
The adopted increase follows the analysis and recommendation of Department of Insurance actuaries, but it stays below the 10.4% increase requested by the Workers’ Compensation Insurance Rating Bureau of California.
An actuary representing public members of the WCIRB board also recommended a rate increase. The new advisory rate takes effect on September 1, 2026.
Insurers do not have to use the adopted benchmark. They remain free to set their own workers’ compensation rates based on underwriting, claims experience and market conditions.
Lara said state officials had already warned policymakers in 2025 about early signs of rising workers’ compensation costs. Those trends now require continued attention because the system affects injured workers, employers and the broader insurance market.
In his 2025 letter to state leaders, Lara warned that higher insurance rates affect employers’ ability to hire and maintain financial growth. He urged policymakers to track early warning signs and respond before cost increases place more strain on businesses.
Our actions must be guided by data and focused on maintaining a workers’ compensation system that protects injured workers, supports California businesses, and promotes a stable and competitive insurance marketplace
Ricardo Lara, California Insurance Commissioner
He added the adopted rate follows a full review of rising cost pressure and said the Department will keep working with stakeholders on measures to keep the system strong.
Higher medical treatment costs, rising medical-legal expenses, more projected cumulative trauma claims and growing claims adjustment costs have weakened accident year combined ratios. Insurer rates, meanwhile, have stayed low. Wage growth from California’s expanding economy has offset part of the increase, but not enough to erase the cost trend.
According to Beinsure, the WCIRB filed its September 1, 2026 pure premium rate proposal with the California Insurance Commissioner after reviewing insurer losses and loss adjustment expenses from accident years 2025 and earlier.
The Bureau proposed advisory pure premium rates averaging 10.4% above the approved September 1, 2025 benchmark. WCIRB attributed the requested increase to higher cumulative trauma claim frequency, rising medical costs and increased allocated loss adjustment expenses.
The California Department of Insurance will schedule a public hearing to review the WCIRB filing. The hearing will give stakeholders an opportunity to comment on the proposed advisory rate and the cost trends affecting California’s workers’ compensation market.
