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Apr 14, 2004 - 11:55 AM
Arnold's Insurance Tutorby Doug Heller
Arnold told the Los Angeles Times that after "closely studying" the idea of regulating workers' comp insurance companies, he concluded that regulation would chase away insurance companies.
We wonder who was tutoring him.
He never contacted the consumer advocates who wrote California's 1988 Proposition 103, the nation's pre-eminent insurance regulation law. If he had, Arnold would have found that insurance companies did in fact leave the state after the law passed... for a total of one day, only to immediately come back and make California one of the most thriving insurance markets in the nation.
Since Prop 103 was enacted, Californians have received $1.2 billion in refunds. Drivers have saved over $23 billion on insurance, according to a study by the Consumer Federation of America. Auto insurance rates have fallen by 22% in California, even as they've gone up by 30% nationwide.
And if, while pouring over the literature, Arnold had studied Insurance Commissioner Garamendi's recent letter to Congress about the importance of maintaining state regulation of insurance, he would have read that "over the past decade California has been more profitable than [the unregulated state of] Illinois in every major line of insurance with the exception of workers' compensation, which was deregulated in California in 1993."
Maybe the workers' comp insurers slipped Arnold their Cliff's Notes on regulation for seaside studying during his recent Hawaiin vacation. They certainly have access to the Gov, having contributed $552,000 to his campaign committees. That includes $100K he cashed recently, in spite of his pledge to both return insurance company contributions (he returned less than 10% of their money) and stop accepting new money.
Not surprisingly, Arnold's plan for workers' comp reform comes straight from the insurers' cheat sheet.
The Gov may want to remember what happened to the last California statewide official who had private tutoring sessions with his insurance industry donors. Chuck Quackenbush went to Hawaii on permanent vacation.
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