A Connecticut legislative panel took no action today on a proposal to set up a state workers' compensation fund, which has drawn fire from business groups.

The bill (SB 553) was the subject of a hearing Tuesday before the Senate Joint Insurance and Real Estate Committee, where it encountered strong opposition from insurance trade organizations.

Kristina Baldwin, a lobbyist for the Property Casualty Insurers Association of America (PCI), said the fact that the bill was not reported out by the committee did not completely foreclose action on the measure.

Organized labor interests that support the bill, she said, could attempt to use other parliamentary options to have the legislation acted on outside of the committee.

Three other insurer groups, in addition to business representatives, opposed the measure at the hearing she said.

When the bill came up Tuesday Ms. Baldwin told the committee that as a general rule states should not be in the insurance business. "Competitive market forces are the best guarantor that consumers receive the best products and services at the lowest possible prices," she testified.

Ernie Teitell, president of the Connecticut Trial Lawyers, said the fund would offer employers a means of obtaining workers' comp insurance if they cannot afford prevailing rates.

"As attorneys representing injured workers we see how devastating workplace injuries can be, and feel that all companies should be afforded the opportunity to acquire insurance," he said.

Ms. Baldwin said such a situation does not exist in the Nutmeg State, which she said has a plethora of comp writers.

"Voluntary loss cost and residual market rate filings in Connecticut have been relatively stable over the last four years, and they certainly are not trending upward," she said.

Ms. Baldwin noted a report by the National Council on Compensation Insurance (NCCI) that states Connecticut's average loss cost is the second lowest in the New England region.

Ms. Baldwin said another measure of the health of a market is the number of insurers writing workers' comp in it. The most recent numbers available, which are from 2003, show that Connecticut is second only to Massachusetts in the Northeast.

According to the 2003 statistics, 74 insurers are writing workers' comp in the state and Connecticut's residual market growth is well below the national average.

"A functioning competitive market is likely to turn into a dysfunctional market by the creation of a governmental competitor that is not required to play by the same rules as its private competitors and that is given competitive advantages," said Ms. Baldwin.

Special Reports /

Conn. State Comp Fund Bill Fails To Move

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