Calif. Comp Guaranteed By Legislature
NU Online News Service, Aug. 22, 2:53 p.m. EST?California Gov. Gray Davis is expected to sign a recently approved measure continuing an assessment used to pay claims against insolvent workers' compensation insurers, according to a representative of a carrier group.
The bill "has a lot of bipartisan support," said Nicole Mahrt, a representative for the Washington-based American Insurance Association.
Authored by Assembly Insurance Committee Chairman Tom Calderon, D- Montebello, AB 2007 will continue the 2 percent charge on workers' comp insurance premiums that was due to sunset this year.
The assessment funds are deposited into the California Insurance Guaranty Fund, which pays for the outstanding claims of insolvent workers' comp carriers. The surcharge was increased last year from 1 percent to 2 percent.
"The passage of AB 2007 is a win for employers and injured workers in California," said Mark Webb, AIA's Western region vice president. "When insurance companies are insolvent, we must have a system in place to safeguard employers who are obligated to provide benefits and continue payments to the injured workers who need to have these benefits paid without interruption."
Ms. Mahrt said the measure had a lot of support because legislators wanted to ensure that injured workers receiving benefits continue to be paid in the even an insurer becomes insolvent.
AIA said another key workers' comp measure awaiting Gov. Davis' signature is AB 1985, which gives the state insurance commissioner authority to block companies from setting workers' comp premium rates that are too low to cover costs.
AB 1985 will also change California law to include the State Compensation Insurance Fund within the requirements of risk-based capital standards. The language will make the state fund meet the same financial criteria as private insurers through the risk-based capital regulatory process, Ms. Mahrt said.
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