How Low Can Rates Go?
By Robert Warne - October 1, 2003 After emerging from legislative escrow, the eight workers’ compensation bills became law yesterday when Governor Gray Davis doused them with ink outside the Los Angeles Chamber of Commerce.
At the signing he said that the California’s workers’ compensation system would get a major overhaul as a result of the bills he signed.
Davis explained, "We're saving money for businesses, non-profits and cities. We're rebuilding the engines of our economy. As I've said before, our system is like a 90-year old busted-up jalopy. It's ugly. It barely runs. It needs more than [a] tune up and a paint job, it needs a complete overhaul."
Insurance Commissioner John Garamendi reportedly told those who attended the event that he hoped to further reduce the initial 2.9 percent rate reduction recommendation to 4 percent.
But it was Senator Richard Alarcon who threw down the gauntlet when he said he wants closer to a 20 percent rate reduction. "If the premiums don't come down the insurance companies are going to have hell to pay because I will not accept anything other than significant reductions," he told the crowd, according to the Associated Press.
The Sacramento Bee reported that Charles Bacchi, a California Chamber of Commerce lobbyist said that, "We're going to keep people's expectations a little bit in line of what reality is.”
The fact is, said Bacchi, "The insurers will come around if the (savings) numbers come true."
Among the many reforms, one of particular interest to the adjuster community is that the insurance commissioner will be required to adopt minimum standards of training, experience and skill for workers' compensation claims administrators and bill reviewers and that insurers will be required to certify compliance.
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