State of a Special Interest

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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.

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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