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How Much From Special Interests?

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Jan 06, 2004 - 02:30 PM

State of a Special Interest

by Carmen Balber and Douglas Heller
In tonight's 20-minute State of the State address, Arnold is expected to make workers' compensation reform the key to his economic recovery plan. But in tonight's speech, insurance regulation is not likely to cross Arnold's lips. Insurance interests have donated nearly $400,000 to Arnold, $235,000 of which came from the nation's largest workers' comp insurers.

Insurers argue that skyrocketing medical costs and claims have forced them to raise workers' comp rates exponentially. Yet a new, but largely unreported, study by the Insurance Services Office and the National Association of Independent Insurers revealed that nationally property/casualty insurers enjoyed their own exponential increase in 2003 -- a 320% jump in profits.

While the insurance industry is rolling in dough, businesses and workers will be left to suffer unless there is true reform. Proposition 103 has contained rate increases for auto insurance and other property/casualty insurers in California, but that law does not apply to workers' compensation insurance. If Arnold really intends to put the State of the State above one special interest he will include Proposition 103's rate regulation and limits on excessive profits for workers' compensation insurers in his recovery plan.

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