State Fund to Cut Back on Extra Value Meals
By Robert Warne - March 26, 2003After years of little or no competition at the work comp dinner table, the California State Compensation Fund (State Fund) is starting to suffer from a case of high claims pressure.
With a steady intake of the finest cuisine the state has to offer to a heavy dosage of Twinkie accounts, State Fund became the industry’s garbage disposal.
Knowing that if this rich diet continued, it wouldn’t be long till even a quadruple legislative bypass could help it, State Fund President Dianne Oki spoke out March 19.
Before the Assembly Insurance Committee she likened State Fund to an over saturated sponge. And according to her interpretation of the insurance code, the carrier could legally choose to not insure certain risks.
She let the legislators know that State Fund’s current underwriting regimen couldn’t continue without serious consequences.
Acting as a personal trainer, Insurance Commissioner John Garamendi disagreed with Oki’s interpretation of the Insurance Code, but agreed that State Fund needed to go on a serious diet.
To get the ball rolling in the right direction, Garamendi plans to make a few minor adjustments in the kitchen so that he can better regulate the carrier’s diet. State Fund will continue to always be present at the workers’ compensation table but ideally it won’t be served the portions it has in the past.
To minimize its intake, brokers’ incentives will be minimized and employers would have to prove they had no other options before State Fund would have to accept the business. Also the days of its fast food dollar value meal prices are drawing to an end.
So if things work out, if things go a good as they look on paper, under the commissioner’s regulatory authority, by this time next year Daren will be out of a job and State Fund will be doing the Subway commercials.
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