As an employee of the SCIF (CA workers comp carrier), I’m very concerned with the direction we are taking in order to help relieve the pockets of the employers of CA. The factors that contribute to the increase in rates are not that simple to pinpoint. Fraud of course is one of the main factors and it’s up to all of us to help eliminate fraud in the workers comp. industry. I read articles very often and they’re all somewhat pessimistic with regards to how we may never really solve the problems of the workers comp insurance, specially when it comes to open claims. It is discouraging for employers but if it’s based on the facts than we’ll just have to accept it. Anybody who’s been hurt while at work deserves to be helped financially until they can get back on their feet, however who’s to say that X amount of $$ is good enough? and for how long? The claim amounts will always be subject to opinion and debate. The carrier feeling they may be paying to much and the employee feeling they’re not getting enough. One thing I’m sure of is we need more private carriers to write workers comp insurance in order to increase competition and this way help drive the cost even lower. How can we do that? that is another challenge.
Much of the problem stems from when open rating was first introduced in 1995. From 1995 through 2000, carriers (including SCIF) cut their rates and pricing simply to buy business.
When, for ever $1 in losses you have, you’re only bringing in 25 cents, there’s no way to make money. Golden Eagle, Superior Nat’l/Cal Comp, Fremont and others are all examples of this. Even the SCIF was in big trouble.
From 2001 on, those carriers that were left knee-jerked and immediately raised rates in order to bring back the $$ they lost.
I’d almost consider this bill to be too little too late. Rates have generally stablized, with minor exceptions.
We are essentially going back to the minimum rate law that was in effect until 1/1/1995.
In order to attract more carriers to CA, several things need to happen:
1. The cut-throat competition that existed from 1995-2000 needs to be eliminated, or at least regulations in place to make sure that carriers are not undercharging in order to “buy marketshare”.
2. Fraud needs to be addressed
3. Correct and timely benefits, along with rehab needs to happen.
4. The delays that some claimants experience in receiving benefits needs to be addressed.
5. All the applicant attorneys need to move somewhere else – like New York.
I’m on the East coast but I’ve read several arrticles recently as respects payroll fraud being committed at an alarming rate in California. I would assume it has to do with the extremely high cost of coverage in that state. There is one solution to payroll fraud, but the regulators in your state are not interested in listening.
If the state would institute the concept of Pay As You Go” (i.e. payroll deducted) Work Comp, it would dramatically reduce payroll fraud while simultaneously improving cash flow for the employers. It would also significantly reduce the expense side of billing, collecting and reconcilling insurance premiums. It would also eliminate audit costs and would improve the carriers bottom line substantially.
We do this on the east coast and it is extremely successful. As you may have suspected, we own a payroll processing business and every insured who qualifies for coverage (through our carrier) opts for this program. Wake up California. Help is here you just have to be willing to change the way you do business.
As an employee of the SCIF (CA workers comp carrier), I’m very concerned with the direction we are taking in order to help relieve the pockets of the employers of CA. The factors that contribute to the increase in rates are not that simple to pinpoint. Fraud of course is one of the main factors and it’s up to all of us to help eliminate fraud in the workers comp. industry. I read articles very often and they’re all somewhat pessimistic with regards to how we may never really solve the problems of the workers comp insurance, specially when it comes to open claims. It is discouraging for employers but if it’s based on the facts than we’ll just have to accept it. Anybody who’s been hurt while at work deserves to be helped financially until they can get back on their feet, however who’s to say that X amount of $$ is good enough? and for how long? The claim amounts will always be subject to opinion and debate. The carrier feeling they may be paying to much and the employee feeling they’re not getting enough. One thing I’m sure of is we need more private carriers to write workers comp insurance in order to increase competition and this way help drive the cost even lower. How can we do that? that is another challenge.
Marcos –
Much of the problem stems from when open rating was first introduced in 1995. From 1995 through 2000, carriers (including SCIF) cut their rates and pricing simply to buy business.
When, for ever $1 in losses you have, you’re only bringing in 25 cents, there’s no way to make money. Golden Eagle, Superior Nat’l/Cal Comp, Fremont and others are all examples of this. Even the SCIF was in big trouble.
From 2001 on, those carriers that were left knee-jerked and immediately raised rates in order to bring back the $$ they lost.
I’d almost consider this bill to be too little too late. Rates have generally stablized, with minor exceptions.
We are essentially going back to the minimum rate law that was in effect until 1/1/1995.
In order to attract more carriers to CA, several things need to happen:
1. The cut-throat competition that existed from 1995-2000 needs to be eliminated, or at least regulations in place to make sure that carriers are not undercharging in order to “buy marketshare”.
2. Fraud needs to be addressed
3. Correct and timely benefits, along with rehab needs to happen.
4. The delays that some claimants experience in receiving benefits needs to be addressed.
5. All the applicant attorneys need to move somewhere else – like New York.
I’m on the East coast but I’ve read several arrticles recently as respects payroll fraud being committed at an alarming rate in California. I would assume it has to do with the extremely high cost of coverage in that state. There is one solution to payroll fraud, but the regulators in your state are not interested in listening.
If the state would institute the concept of Pay As You Go” (i.e. payroll deducted) Work Comp, it would dramatically reduce payroll fraud while simultaneously improving cash flow for the employers. It would also significantly reduce the expense side of billing, collecting and reconcilling insurance premiums. It would also eliminate audit costs and would improve the carriers bottom line substantially.
We do this on the east coast and it is extremely successful. As you may have suspected, we own a payroll processing business and every insured who qualifies for coverage (through our carrier) opts for this program. Wake up California. Help is here you just have to be willing to change the way you do business.