CA: Regulator lashes out against State Fund insurer

The Desert Sun ^ | March 19th, 2004 | Jim Sams

[calcowgirl]

The State Compensation Insurance Fund, also known as State Fund, is a workers

[John Jorsett]

He said the state employees who manage the mammoth carrier have refused to let his auditors examine their books

What kind of insane system have we got where the bloody insurance commissioner can't examine the books of a state-owned insurance company? And where the hell is the legislature on this? They ought to be hauling the State Fund execs up for a public flogging in committeee hearings.

Every time I think I've heard the ultimate nutty thing about California government, it tops itself.

[Who dat?]

What kind of insane system have we got where the bloody insurance commissioner can't examine the books of a state-owned insurance company? And where the hell is the legislature on this?

They probably want access to underwriting criteria. The state isn’t entitled to underwriting criteria (in any line of insurance that I’m aware of) and they know it. They’re entitled to everything else though – and his DOI has to approve *every* rate change or rate proposal before it can be implemented - complete with explanation and evidence as to why the changes are necessary.

Those filings are public information. You could personally go to your state DOI and request the (whatever-date) filing from (whatever-company) and read it for yourself.

But that’s a distraction from the fact that, IMO, Garamendi is one of the biggest fools in the state. That’s quite an accomplishment.

[John Jorsett]

They probably want access to underwriting criteria.

Since the State Fund is the insurer of last resort, wouldn't the criteria be: we take anyone who shows up?

and his DOI has to approve *every* rate change or rate proposal before it can be implemented

Would that imply that his office had to have approved the discounts for big customers - the very thing that he's now complaining about?

[Who dat?]

Since the State Fund is the insurer of last resort, wouldn't the criteria be: we take anyone who shows up?

They will, but the rate they pay will be different depending on (whatever).

Would that imply that his office had to have approved the discounts for big customers - the very thing that he's now complaining about?

Yes, but it’s misleading in a couple of ways. First, the state fund for w/c is a lot like the state fund for auto insurance – the state mandated that you must carry that insurance, now they have to have some gimmick by which you can get it. So the people that typically end up getting insurance there are often people that can’t get it anywhere else.

The other thing (and I’ve heard Garamendi several times on the Ronn Owens show b!tching about w/c and how big companies like UPS have such huge discounts while mom/pop stores take a bath in the state fund, etc.) is that some companies DO get much cheaper rates due to size and nature of work – but a lot of big companies self-insure and hire a third party to administer it.

So when Garamendi was carping about UPS vs. mom/pop store, he knows good and well that (as of 3-4 years ago) UPS was self insured WRT w/c. Self-insured with Liberty Mutual acting as administrator, IIRC. They also used to self-insure WRT vehicles, facilities, and equipment. Just that some of his comparisons aren't apples/apples. FWIW.

[BJungNan]

Why is it that we see no word mentioned about the cost to the system from lawyers? Getting the private attorneys out of the system is the first place to make real progress in cutting costs and improving the system.

Employers complain the cost is driving businesses out of the state, [lawyers] while workers say their benefits are held up by long legal battles. [lawyers - getting paid more the longer it takes to settle]