Arnold Schwarzenegger ... most people know him as the Terminator, a moniker he picked up after starring in a series of action movies, and as the "Governator" of California since November 2003. But in the insurance industry he has made a name for himself as the reformer of California's workers' compensation system.
"California is turning into a poster child for comp," says one insurance industry source. "Schwarzenegger maybe only signed the paper, but he gets the credit since it's going well."
Workers' compensation became a big issue in 2003 as companies complained about soaring rates. Landmark reforms won by Schwarzenegger in 2004 have helped to control costs and bring down premiums.
Among other things, the legislation limited the number of visits injured workers could make to doctors and chiropractors and required more stringent review of the type of care being provided.
In a press release issued in 2005, just one year after the reforms were signed into law, the California Division of Workers' Compensation said that employers would see a rate reduction estimated at more than 26 percent from the peak rates charged in 2003.
An article from 2005 stated that premiums had dropped as much as 40 percent since the height of the crisis.
California Insurance Commissioner Steve Poizner in May called for an additional 14.2 percent decrease in workers' comp pure premium rates, citing the vibrant and profitable workers' comp market.
Workers' comp insurers are currently enjoying record-low loss ratios of 37 percent, according to the commissioner.
ALSO: READ THE OTHER PARTS TO THE INNOVATION SHOWCASE ISSUE.
September 15, 2007
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