Calif. Senate Committee Okays Comp Bill
By Caroline McDonald
NU Online News Service, June 28, 10:35 a.m. EST?The California Senate Labor and Industrial Relations Committee on Wednesday approved a bill that would give the insurance commissioner authority to determine whether workers' compensation rates are adequate.
AB 1985, authored by Assemblyman Tom Calderon, D-Montebello, passed the committee on a 5-3 vote. The measure would allow the commissioner to disapprove rates that the department believes would be "inadequate, unfairly discriminatory," or create a monopoly in the marketplace, Mr. Calderon said.
The Department of Insurance, which sponsored the bill, said in a summary that the bill is "necessary to clarify the department's authority to regulate workers' compensation insurance rates and stabilize the market."
It also argues the bill will "restore pricing and underwriting stability to the market, which will provide adequate revenues to fund benefit level increases."
The California Manufacturers and Technology Association has opposed the bill, saying it is "supposed to address the issue of insurers' insolvency," and that "the bill does very little to address the issue."
Nicole Mahrt, director of public affairs for the American Insurance Association in Sacramento, said "the AIA is now neutral on the amended version because we think it balances the need to maintain solvency with the need to promote competition. It's a good step."
Previously the AIA had concerns, she said, because "the insurance commissioner wanted to put more amendments into the bill, but the author decided to move it this way."
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