AIA Sums Up Calif. WC Bills

By Caroline McDonald

NU Online News Service, Aug. 6, 3:50 p.m. EST?An update today on 2002 workers' compensation bills in California by the American Insurance Association restated the association's support of legislation significant to insurers.

Mark Webb, vice president for state affairs, gave a conference call summary of what can be expected this month in workers' comp legislation.

The most significant piece of legislation, he said, will be the "as yet unmaterialized cleanup bill to Assembly Bill 749," sponsored by Insurance Committee Chairman Tom Calderon, D-Montebello. The workers' comp benefit increase package was signed into law last February.

"There have been a number of discussions between the stakeholders from the system on what to include in this, but at this point it doesn't appear that any real decisions have been made," Mr. Webb explained.

He said he anticipates the bill will be "somewhat minor in its objectives and probably correcting or clarifying the most significant legal and other problems" generated in the "rush" to get AB 749 signed into law.

In terms of other workers' comp legislation, he said, there are only three other bills that have significance for insurers. The AIA supports these bills.

? Assembly Bill 2007, sponsored by Tom Calderon, D-Montebello, continues the 2 percent assessment and surcharge to fund the workers' comp account in the California Insurance Guaranty Fund.

? This bill, he said, is now joined with Senate Bill 2093, sponsored by Sen. Jackie Speier, D-San Francisco, which makes reforms to the workers' comp insurance special deposit law. This law, he said, requires insurers to set aside a deposit of a certain amount of premium every year in case a company becomes insolvent.

This, he said, will provide "an immediately accessible amount of resources to pay claims while the company is liquidating and while the Guaranty Association gets online and is activated."

Both bills at this point are "very technical," he said. Discussions are centered around how reinsurers are going to make their deposits, "but we expect those issues to get worked out and both those bills should go to the governor," he said.

? The third significant bill, he said, is Assembly Bill 1985, sponsored by Tom Calderon, D-Montebello, which makes amendments to California's competitive workers' comp insurance rating law and makes the State Compensation Insurance Fund "subject to the requirements of risk-based capital standards."

The bill also gives the insurance commissioner more authority to deny inadequate rates, he said.

Mr. Webb said the AIA believes that making the State Fund subject to risk-based capital standards is "very important." He continued that, "They should be under the same regimen as all other workers' comp insurers."

AB 1985, he said, left the Senate Appropriations Committee on Monday, and will soon be on the Senate floor. "Assemblyman Calderon intends to send that bill to Gov. Gray Davis and we anticipate that it will be signed," Mr. Webb concluded.

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AIA Sums Up Calif. WC Bills

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