Outgoing California Insurance Commissioner John Garamendi said “California is not prepared for the financial consequences of a major disaster” and more work needs to be done to improve the state’s workers’ compensation system.
At his final Capitol news conference as Insurance Commissioner, Garamendi reviewed his contributions as the state’s first elected Insurance Commissioner and highlighted what he saw as the top insurance issues for 2007.
The four issues he said are critical to the well being of Californians and our economy; health insurance, job creation, workers’ compensation insurance and national catastrophe insurance. A long-time proponent of health care reform, Garamendi said the absolute need to reform the health care system remains critical, including reform of benefits packages.
“We can and will pursue policies that will expand access to health care in California,” Garamendi said. “We must choose polices that emphasize primary care, prevention and disease management as first dollar coverage.”
When he took office in 2003, Garamendi said the California workers’ compensation insurance industry was in crisis with high premiums and claims costs rising at nearly eight times the rate of inflation. Injured workers were unable to obtain the care to which they were entitled because of inefficiencies in the system, he said.
“The dysfunction in the system threatened to cripple business and rob the state of its economic vitality,” he said. “But today it’s a different landscape. We’ve made much progress; the State Compensation Insurance Fund has lowered its rates and reduced its share of the insured market from over 50 percent in 2003 to less than 40 percent in 2006. This reduction in market share has enabled increased competition and a healthier market going forward. But there is much room for improvement, and I look forward to seeing what the Department will accomplish in the years ahead.”
Garamendi noted that Californians will likely face another natural disaster in the near future. “Many homeowners and businesses do not carry insurance for specific catastrophes such as flooding and earthquakes. The cost of rebuilding from a natural catastrophic event would be enormous and perhaps crippling,” he said.
Garamendi said he would continue to urge a national solution, to assist consumers in all parts of the country to recover from disasters, without total reliance on the federal government’s emergency response.
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