On the Mend

Many California employers and insurers are anxious to see whether newly enacted reforms will cure what ails that state's workers' compensation insurance system. For the past several years, many California employers, facing premiums that were more than twice the national average, left the state headed for more business friendly climates. Since 2000, these employers saw their workers' compensation premiums jump more than 130%. So many private insurers have ceased writing workers' compensation business in California that the State Compensation Insurance Fund of California, the "insurer of last resort," presently provides coverage to more than half of California's businesses. In April 2004 - a mere six months after the 2003 reforms became effective - the California Legislature approved more comprehensive reforms of the system that are estimated to result in 25% to 30% reduction in the cost of workers' compensation coverage. Other states faced and still face similar problems with their workers' compensation systems.