California Governor Gray Davis (D) has signed two measures to improve how the California Department of Insurance regulates the solvency of workers’ compensation insurers, the American Insurance Association (AIA) said. One bill, AB 1985, authored by Tom Calderon (D), provides the California Insurance Commissioner authority to deny inadequate workers’ comp rates.
“Under AB 1985, the California Insurance Commissioner will have the necessary authority to ensure that insurers are charging adequate rates to cover future losses,” says Mark Sektnan, assistant AIA vice president, western region. “AB 1985 levels the playing field by requiring the State Compensation Insurance Fund to meet the same requirements of risk-based capital as private insurers.”
Governor Davis also signed SB 2093, authored by Senator Jackie Speier (D). This bill reforms the workers’ comp insurance deposit law in California.
“Deposits by workers’ compensation insurers guarantee that injured workers continue to receive benefits if a carrier becomes insolvent. SB 2093 balances the need to have a readily accessible deposit without imposing significant additional financial burdens on insurers,” concluded Sektnan.
Both laws will take effect on January 1, 2003.
Topics California Carriers Legislation Workers' Compensation
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