Under New Law, CMTA will Offer Members Workers’ Compensation Program

By CMTA Staff

Capitol Update, Oct. 31, 2003 Share this on FacebookTweet thisEmail this to a friend

SB 1007 authored by Senator Jackie Speier (D-Hillsborough) and sponsored by California Manufacturers & Technology Association is one of the workers’ compensation reform bills signed by Governor Davis. The bill would allow CMTA to form a group program for the purpose of securing workers’ compensation insurance for members.

Currently, the Insurance Code requires that in order for an association or trade group to form a group insurance program, at least 75 percent of its regular membership must be engaged in a common trade or business. Common trade or business is defined in the Insurance Code for such industries as logging, agriculture, transportation and construction. There is no definition for manufacturers that would allow the many manufacturing classes who are members of CMTA to participate in a broader based group workers’ compensation program.

SB 1007 amends the Insurance Code to include manufacturing facilities as identified in Sector 31 to 33 inclusive, of the North American Industry Classification System (NAICS). By adding this definition of manufacturers, it paves the way for employers and employees engaged in California's diverse manufacturing community to experience the benefits of group workers’ compensation insurance.

Employers who participate in group workers’ compensation programs have traditionally improved their loss experience by implementing effective safety programs that reduce workplace injuries and illnesses. Insurance rate-making practices are heavily influenced by loss experience, and effective safety programs will help employers reduce their insurance cost. In addition to reducing cost, the group program would provide additional incentives for manufacturers to provide a safe and healthful place for their employees to work.

SB 1007 becomes law on January 1, 2004 and CMTA is setting up a Group Workers’ Compensation Insurance Program. More information on the program will be provided at a later date.
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