Gino DiCaro

Regulation of Workers’ Comp Premiums Proposed

By Gino DiCaro, VP, Communications

Capitol Update, Jan. 9, 2005 Share this on FacebookTweet thisEmail this to a friend

In a press conference on January 5th, Senator Richard Alarcon (D-Sun Valley) introduced legislation that would regulate the premiums provided by workers’ compensation insurance carriers to California employers. A similar attempt to include premium regulation in last year’s SB 899 failed.

In his remarks, Senator Alarcon criticized insurance companies and their failure to pass on savings to policy holders. "We did nothing to hold insurance companies accountable for reasonable prices. They’re gouging the state of California exactly as the energy companies did a few years ago."

Despite the sharp criticism, the Schwarzenegger administration believes that the reforms enacted last year still need time to materialize and work. Regulating premiums now would be premature and would scare away insurance providers just when they’re starting to come back into the market. "All signs are pointing toward cost reduction, rate reduction and increased competition", said Schwarzenegger spokesman Vince Sollitto.

CMTA argues that the major cost savings to employers will not be felt for another 6 to 12 months. In fact, many of the regulations from last year’s legislation just became effective on January 1st.

The tussle over California’s workers’ compensation system will yet again be at the forefront this session. The labor unions and applicant attorneys are prepared to take this issue to the ballot if necessary.
Read more Workers' compensation articles

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