Alarcon Posturing on Poochigian’s Plan
By Robert Warne - February 19, 2004Senator Richard Alarcon continues to wring his hands over further workers’ compensation reform.
Based on his belief that claimants pay for any tweaks to the bloated system he is unmotivated to get behind any reform plan without a guarantee that carriers will pass the savings onto employers.
He also advocates rate regulation despite the fact that carriers writing workers’ compensation insurance in California haven’t generated a net operating profit for seven straight years and continue to pay out $1.17 in costs for every $1.00 in earned premium, according to the American Insurance Association.
Alarcon recently made a request for the Workers’ Compensation Insurance Rating Bureau (WCIRB) to score the potential savings from Governor Arnold Schwarzenegger’s work comp reform plan embodied in Senator Charles Poochigian’s SB4X-9 legislation.
The WCIRB responded by saying that SBX4-3 involved complex multi-dimensional changes and that the cost saving implications couldn’t be fully and accurately assessed at this time. The WCIRB gave four reasons why it couldn’t produce a figure for legislators to hang their hats on and also said that an accurate estimate would also take into account AB 749, AB 227 and SB 228 which are all new and there is limited data available.
But Alarcon didn’t appreciate the WCIRB’s honesty that it wasn’t going to jeopardize its credibility by assigning arbitrary cost saving figures to the legislation.
He said, “the refusal of the Workers’ Compensation Insurance Ratings Bureau (WCIRB) to put a figure on the potential savings of the governor’s reform package signals the Insurance Industry is once again unwilling to guarantee that savings will be passed on to employers.”
And like the Energizer Bunny, Alarcon just keeps on going and going when he says, “Past experience has taught us that we cannot continue to trim benefits to injured workers before being absolutely certain that those cost savings will be passed on to the employers in the form of lower premiums.”
To read Alarcon’s remarks in whole and to read the WCIRB’s complete response to his requestion go to: http://democrats.sen.ca.gov/servlet/gov.ca.senate.democrats.pub.members.memDisplayPressList?district=sd20. | 
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