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Jul 08, 2004 - 12:30 PM
Raising Cainby Douglas Heller
By signing a worker's comp "reform" law that failed to provide any regulatory controls over the insurance companies that have been jacking up California businesses' premiums in recent years, we thought Arnold had done all he could to repay the workers' comp insurers that donated over half a million to his campaigns. Perhaps we underestimated his allegiance to the special interests.
Earlier this week, the Gov, named Jeanne Cain to be the new Chairwoman of the State Compensation Insurance Fund, commonly known as the State Fund (the state's publicly managed workers' compensation insurance company). Ms. Cain, who like so many of Arnold's appointees, comes straight from the ranks of the Sacramento lobbying corps, is the third Chamber of Commerce lobbyist the Gov has brought into his administration. More notably, however, Cain is a former Vice President of the American Insurance Association (AIA).
The AIA, which met privately with Schwarzenegger in DC last February, was very active in the workers' comp debate and must love the idea of having one of their own overseeing the State Fund. Because of its huge share of the workers' comp insurance market, the State Fund sets the bar for premiums in California and if its premiums are kept high, the unregulated insurers will have cover for keeping their premiums above what's reasonable. Last year, according to industry data, profits in the insurance industry were up as much as 1000% with many of California's workers' comp specialists gaining triple digit profit increases. With Arnold putting Cain in charge of the State Fund, the workers' comp market must be looking more and more like the Garden of Eden to the insurers.
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