California Insurance Commissioner praises veto of worker’s comp insurer legislation

(Sacramento, CA – Insurance News and Markets) – In October, California Insurance Commissioner Dave Jones had positive words to say for Governor Brown regarding his veto of Assembly Bill 1922.

Assembly Bill 1922 would have decreased transparency and weakened protections for businesses of all sizes. It would have eroded recently updated California Department of Insurance (CDI) regulations protecting businesses that took effect on April 1, 2016.  The bill was vetoed on Sept. 30.

“I thank Governor Brown for his thoughtful and reasoned veto of AB 1922,” Jones said. “I opposed the bill, because it would have created a loophole enabling workers’ compensation insurers to limit or avoid prior review of terms and conditions imposed on businesses. AB 1922 undercut the Department of Insurance’s ability to protect businesses from becoming victimized by some workers’ compensation insurer contracts and it would have resulted in more litigation between businesses and insurers. The bill was bad for employers of all sizes.”

Current law requires workers’ compensation insurers to file their policies and related agreements with CDI for approval before a policy is issued. CDI has 30 days to review the policy to ensure that they comply with state law. The vetoed bill would have allowed workers’ compensation insurers to avoid regulatory oversight under a confusing and complicated scheme. CDI would not have been able to protect businesses from potential harm via these agreements.

Source: California Department of Insurance.