California Fixes its Workers Comp Crisis Part III·

A New Insurance Commissioner – when Commissioner Steve Poizner came into office immediate changes occurred in the California Workers Compensation arena. The following are some of the changes he enacted:

• The cleaning up of the California State Fund (SCIF) – There was a large amount of conflicts of interest and not accountability in SCIF. Commissioner Poizner made SCIF more accountable in all areas. He also eliminated all the conflicts of interest that existed in SCIF. The conflicts of interest centered on officials and Board of Directors referring work to companies that they privately owned.
  
• More control exerted on the California Workers Comp Insurance Rating Bureau (WCIRB) – Commissioner Poizner made the WCIRB more accountable for their increases and decreases in the pure premium rates. He immediately overruled a rate increase. The figures that he predicted have seemed to be very accurate.

More Workers Comp insurance carriers entering the market – this is the final positive and the most important result of the California Workers Compensation reform. With all the reforms in place now in California, the market became more competitive. The barriers to entry to the Workers Comp insurance carriers were removed. The more carriers in the marketplace, the more healthy is the competition. Now that Workers Comp insurance carriers can now forecast a profit, there are more carriers writing policies which will reduce the Workers Comp premiums that they charge.

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