AB 1513, as introduced, Committee on Insurance. Workers’ compensation: studies.
Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation, to compensate an employee for injuries sustained in the course of his or her employment.
Existing law requires the Commission on Health and Safety and Workers’ Compensation to undertake a specified study examining the causes of the number of insolvencies among workers’ compensation insurers to be conducted by an independent research organization, and requires the commission and the Department of Industrial Relations, no later than July 1, 2009, to publish the report of the study on its Internet Web site and to inform the Legislature and the Governor of the availability of the report.
This bill would repeal these obsolete workers’ compensation study requirements.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 77.7 of the Labor Code is repealed.
(a) A study shall be undertaken to examine the causes
3of the number of insolvencies among workers’ compensation
4insurers within the past 10 years. The study shall be conducted by
5an independent research organization under the direction of the
6commission. Not later than July 1, 2009, the commission and the
7department shall publish the report of the study on its Internet Web
8site and shall inform the Legislature and the Governor of the
9availability of the report.
10(b) The study shall include an analysis of the following: the
11access to capital for workers’ compensation insurance from all
12sources between 1993 and 2003; the availability, source, and risk
13assumed of reinsurers during this period; the use of deductible
14policies and their effect on solvency regulation; market activities
15by insurers and producers that affected market concentration;
16activities, including financial oversight of insurers, by insurance
17regulators and the National Association of Insurance
18Commissioners during this period; the quality of data reporting to
19the commissioner’s designated statistical agent and the accuracy
20of recommendations provided by the commissioner’s designated
21statistical agent during this period of time; and underwriting, claims
22adjusting, and reserving practices of insolvent insurers. The study
23shall also include a survey of reports of other state agencies
24analyzing the insurance market response to rising system costs
25within the applicable time period.
26(c) Data reasonably required for the study shall be made
27available by the California Insurance Guarantee Association,
28Workers’ Compensation Insurance Rating Bureau, third-party
29administrators for the insolvent insurers, whether prior to or after
30the insolvency, the State Compensation Insurance Fund, and the
31Department of Insurance. The commission shall also include a
32survey of reports by the commission and other state agencies
33analyzing the insurance market response to rising system costs
34within the applicable period of time.
35(d) The cost of the study is not to exceed one million dollars
36($1,000,000). Confidential information identifiable to a natural
37person or insurance company held by an agency, organization,
38association, or other person or entity shall be released to researchers
P3 1upon satisfactory agreement to maintain confidentiality.
2Information or material that is not subject to subpoena from the
3agency, organization, association, or other person or entity shall
4not be subject to subpoena from the commission or the contracted
5research organization.
6(e) The costs of the study shall be borne one-half by the
7commission from funds derived from the Workers’ Compensation
8Administration Revolving Fund and one-half by insurers from
9assessments allocated to each insurer based on the insurer’s
10proportionate share of the market as shown by the Market Share
11Report for Calendar Year 2006 published by the Department of
12Insurance.
13(f) In order to protect individual company trade secrets, this
14study shall not lead to the disclosure of, either directly or indirectly,
15the business practices of a company that provides data pursuant
16to this section. This prohibition shall not apply to insurance
17companies that have been ordered by a court of competent
18jurisdiction to be placed in liquidation under the supervision of a
19liquidator or other authority.
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