NEVADA COURT REFUSES TO BLOCK MED-MAL INITIATIVE:
The Nevada Supreme Court ruled on Aug. 24 that a medical malpractice insurance initiative will remain on this November's ballot despite efforts by attorneys representing malpractice victims to block it, according to the Associated Press. Nevada doctors, who pushed for the initiative titled "Keep Our Doctors in Nevada," believe that reforms passed by the Legislature in 2002 did not go far enough. The initiative, if approved by voters, would limit noneconomic damage awards in med-mal cases to $350,000 with no exceptions and limit fees for attorneys. Laws passed in 2002 also limited noneconomic damage awards to $350,000, but specified certain exceptions. The high court ruled against attorneys representing the Nevada State AFL-CIO, Progressive Leadership Alliance of Nevada, Rev. John Auer III, the National Organization for Women and the Nevada Young Activist Project. The petitioners said that the initiative does not present enough information to assess its impact, thus misleading voters and violating state and federal constitutions. The initiative advanced to this year's election after it was validated in December 2002 and the Legislature did not act upon it in 2003. The court said that the petitioners seeking to block the initiative could not give a reason why they waited a year to file their petition. Doctors hope that the cap on noneconomic damages will help keep doctors in the state.
STATE FARM TO LOWER CALIFORNIA AUTO INSURANCE RATES:
State Farm will lower auto rates for its California auto insurance customers an average of 7.6 percent effective October 1. The California Department of Insurance-approved rate reduction will save the company's 3 million policyholders more than $215 million in auto insurance premiums. The greatest savings will be realized by policyholders who have been with State Farm for more than 6 years and who also have certain other types of State Farm insurance in addition to their auto coverage. The new rates apply equally across the state. According to State Farm, the ability to lower rates was due to a number of factors including auto accident and insurance claim trends. In addition, State Farm officials point to internal company efforts at managing costs as a major benefit contributing to the opportunity of lowering rates.
CALIFORNIA WORK COMP FRAUDSTERS TO BE POSTED ON WEB:
Governor Arnold Schwarzenegger recently signed into law AB 2866, legislation that requires individuals and companies convicted of workers' compensation insurance fraud to be posted on the Web, according to the Gilroy Dispatch. The California Department of Insurance is required to post the information, including the name of the individual or company, the punishment that was administered (including fines and length of jail time) and the amount of money defrauded in the scam. The legislation was sponsored by Assembly Majority Leader Dario Frommer (D-Glendale). Lawmakers hoped that the postings will serve as an added punishment to those convicted of fraud and as a deterrent for committing workers' comp fraud. Industry experts estimate that workers' comp fraud costs California as much as $3 billion a year.
CALIF. LEGISLATURE, GOV. TAKE POSITIVE STEPS ON ISSUES:
The Association of California Insurance Companies (ACIC) commended the Legislature and governor for taking positive, responsible steps this year on major insurance-related bills. "During the recently concluded legislative session, our state leaders stepped forward and tackled the tough issues: overhauling California's broken workers' compensation system and crafting programs in the aftermath of last year's fires that will help the victims of these fires and future fire victims," said ACIC President Sam Sorich. In April, the Legislature and governor approved significant workers compensation reforms. Although not fully implemented, they are already lowering rates and stabilizing California's turbulent workers' compensation insurance system. "During the reform debate, it was suggested that state-mandated rate regulation be included as part of the overhaul package. To the governor and Legislature's credit, the concept of strict rate regulation was rejected in order to give the new reforms a chance to succeed," Sorich said. The Legislature and governor also worked together in addressing issues that arose after last year's devastating fires in Southern California. Just recently, the governor signed into law three key bills: SB 1855, SB 64, and AB 2199. ACIC supported all three measures. "These bills will help current and future fire victims through expanded mediation, greater policy information and extended periods for reconstruction," said Sorich. The mediation and time-of-construction bills went into effect upon the governor's signature in late August. The insurance policy bill becomes effective Jan. 1, 2005. Another insurance-related bill passed by legislators this year, however, would hurt rather than help California policyholders. The measure, SB 494, was sent to the governor in the waning days of the session. The governor has until the end of September to act on the bill. SB 494, sponsored by the plaintiff attorneys, focuses on fees charged by Medi-Cal providers. Medical care providers now agree to accept set fees for services to Medi-Cal patients. SB 494 would allow medical care providers to charge potentially higher fees for services to Medi-Cal patients who are plaintiffs in liability lawsuits. The bill affects all liability insurance, including homeowners, auto and commercial general liability. "This bill, if allowed to become law, will affect the wallets of every Californian by increasing insurance rates to pay the additional medical care fees for Medi-Cal patients," said Sorich, who noted that ACIC has asked the governor to veto SB 494.
WASH. L&I PROPOSES SMALL INCREASE IN WORKERS' COMP RATES IN 2005:
Workers' compensation premiums would increase an average of only 3.7 percent next year under a proposal issued by the Washington Department of Labor and Industries (L&I). The increase is the lowest in three years because of higher investment earnings and positive program trends. "We've had a good year financially, and we also are making substantial progress in controlling medical costs and getting injured workers back to work as soon as it is medically appropriate," said L&I Director Paul Trause. "The increase in the average length of time-loss claims appears to be leveling off and investment earnings have improved. Given these favorable trends and the continuing economic challenges facing employers and workers, we settled on an increase that would simply keep pace with increased costs." If adopted, the higher premium rate would cover anticipated increases in the cost of workers' compensation benefits for workers injured on the job next year. Trause will make a final decision on rates in late November. The new rates take effect Jan. 1, 2005. The 3.7 percent increase is an average for all industries and employers. Individual rates will be higher or lower based on the cost of an employer's recent claims and the frequency of claims in the risk classes in which they are reporting.
