Garamendi, Schwartzenegger Discuss Comp Summit

|

By Caroline McDonald

|

NU Online News Service, Oct. 27, 10:47 a.m.EST? A California workers' compensation summit may be onthe horizon once Governor-elect Arnold Schwartzenegger takes officein November, a spokesman for the State Insurance Departmentsaid.

|

The topic was raised when California Insurance Commissioner JohnGaramendi and Mr. Schwartzenegger exchanged views in a privatemeeting last week, department spokesman, Norman Williams, toldNational Underwriter.

|

"The commissioner proposed a summit, the governor-elect was veryinterested in it," Mr. Williams said.

|

He said the summit suggested by Mr. Garamendi, which would seekmore expert input on the problems plaguing the $29 billion workers'comp system, would be comprised of labor, business, attorney andmedical community representatives?"all the people involved in thesystem."

|

Mr. Williams continued that Mr. Garamendi and Mr.Schwartzenegger "both believe the system costs too much and theyneed to fix that in order to bring relief to California's economy,because it's all about jobs."

|

The two agreed to work together to improve workers' comp, henoted. "The commissioner strongly suggested that [Mr.Schwartzenegger] call a special session of the Legislature on thisissue," he said. Mr. Williams added that the two did not indicatewhen they would meet again.

|

Since taking office in January, Mr. Garamendi has worked tochange the system. He said his efforts helped push throughlegislation that will save an estimated $4-to-$6 billionannually.

|

"Our economy cannot recover unless more jobs are created tostimulate the state's revenue stream," Mr. Garamendi said in astatement. "Businesses cannot create jobs when they are burdenedwith the enormous weight of this dysfunctional system. TheGov.-elect and I are in very close agreement on that, and we alsohave similar ideas on how to deal with the problems of workers'compensation."

|

Mr. Garamendi recently launched the second stage of his workers'comp reform effort, detailed on www.insurance.ca.gov.

|

During phase two he said he will direct the department to tacklethe permanent disability rating system, reinvigorate efforts tocombat fraud, and work to institute 24-hour care as a health caresubstitute for multiple coverages already provided byemployers.

|

The department said his plans also include work to reform theState Compensation Insurance Fund, which has experiencedoverwhelming growth in recent years due to the collapse of morethan two-dozen workers' comp carriers.

|

During his meeting with Mr. Garamendi, Mr. Schwarzenegger wasbriefed on the department's role in protecting consumers and asregulator of the state's $87 billion insurance industry, thedepartment said.

|

Mr. Schwarzenegger's announced five-step plan to "rein in therunaway workers' compensation system" calls for:

|

? Gaining control over abusive claims.

|

? Reducing excessive disability costs.

|

? Eliminating unnecessary costs due to litigation, fraud andabuse.

|

? Reevaluating the State Compensation Insurance Fund.

|

? Addressing other significant factors such as medical feeschedules, vocational rehabilitation expenditures and potentialcost increases from recent legislation.

|

His plan is described on his Web site at www.joinarnold.com

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.