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Lawmakers, Businesses Look At Workers’ Compensation Reform

State Insurance Commissioner John Garamendi is hoping to convince about a half dozen insurers to pump up their share of the California workers´ compensation market.

Garamendi says the additional activity would create competition that could help drive down insurance prices.

He leaves Saturday for a meeting of the National Association of Insurance Commissioners in New York. While in New York he´ll also have meetings with five or six insurers that have small shares of the California workers´ comp market but have significantly cut back their business here.

California´s workers´ compensation system was rocked by a rate war in the mid-1990s that drove many insurers out of business or out of California. Since then, employers´ workers´ comp insurance rates have skyrocketed.

Meanwhile, signature gathering has started for a ballot initiative to reform the state´s workers´ compensation insurance system, but backers say they´d still prefer to achieve reform in the state legislature.

Roy Gabriel, Director of Labor Affairs for the California Farm Bureau in Sacramento says Republican legislative leaders, businesses and farm groups started the signature push for the November ballot. “The principal effort is to try and seek a legislative solution to bring about workers´ compensation reform,” Gabriel said.

But, he added, Governor Schwarzenegger has indicated this is one of his number one issues. “Unless the legislature solves this problem immediately, he´s going to leave it up to the voters in November and has expressed his willingness to back an initiative.”

Businesses and farmers have seen worker´s compensation insurance premiums rise sharply and call reform “crucial.”

Backers of the ballot initiative plan to gather at least a million signatures. “They needed to start this week,” Gabriel said. “They need at least 600,000 legal signatures, but they´re going to try and collect over a million.”