AIA Applauds Passage of Bill Protecting Important Safety Net for Injured Workers

September 10, 2001

The California State Senate and Assembly voted to approve a measure that will raise the surcharge on workers’ compensation insurance premiums to protect the solvency of the workers’ compensation account within the California Insurance Guarantee Fund (CIGA).

“Everyone in the industry has an obligation to make sure that the claims of workers injured on the job are paid,” said Mark Webb, AIA vice president, state affairs. “This bill ensures that workers and their employers are protected even if an insurer becomes insolvent.”

Recent insolvencies of two major insurers have put the workers’ comp guarantee fund at risk. CIGA estimates that, unless more funds are raised through this additional assessment, it could run short of money to pay claims by January 2002.

The bill, AB 1183, sponsored by Assemblyman Tom Calderon (D-Montebello), would raise the assessment charged to workers’ compensation insurance premiums from 1 percent to 2 percent. The additional funds will go toward California’s guarantee fund, which pays outstanding claims of insolvent workers’ comp carriers.

“This is an important measure for California’s injured workers, said Webb. “I am hopeful that Governor Davis will sign this bill quickly.”

The Senate voted 27 to 3 in favor of AB 1183 and the Assembly voted 59 to 3 to concur on the Senate amendments and send the bill to the Governor’s desk.

AB 1183 includes an urgency clause so the bill would take effect immediately if signed into law by Governor Gray Davis.

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