FOR IMMEDIATE RELEASE
May 10, 2004
CHSWC approves draft background paper on California Insurance
Guarantee Association (CIGA)
SAN FRANCISCO -- The California Commission on Health and Safety and Workers' Compensation (CHSWC) unanimously voted at its public meeting on June 10, 2004 in San Francisco to circulate for public comment the CHSWC draft background paper on the California Insurance Guarantee Association (CIGA).
The California Insurance Guarantee Association (CIGA) was established in 1969 to administer and pay the covered claims of insolvent property and casualty insurance carriers. CIGA obtains the funds to pay its covered claims through assessments charged to member companies. CIGAs assessments are based on the amount of net written premiums paid by employers. To the extent that the net written premium is reduced by large deductibles, the CIGA collections from assessments are also reduced.
In May 2004, CHSWC Chairperson Tom Rankin requested that CHSWC examine the issue of CIGA and high deductible policies. In response, CHSWC staff prepared a paper whose goal was to look at how to reduce the long-term cost of CIGA assessments and to spread these costs equitably among large and small employers. CHSWC staff were asked to look at additional alternatives at reducing the costs of the assessment to small employers.
The CHSWC background paper recommends assessing all employers according to the amount of their premiums before any credit or reduction for large deductibles. In addition, the paper recommends that CIGA would not be responsible for penalties for late medical bills of the insolvent insurer.
CHSWC, created by the workers' compensation reform legislation of 1993, is charged with overseeing the health and safety and workers' compensation systems in California and recommending administrative or legislative modifications to improve their operation. The Commission was established to conduct a continuing examination of the workers' compensation system and of the state's activities to prevent industrial injuries and occupational diseases and to examine those programs in other states.
Since its inception in 1994, CHSWC has held meetings, conducted fact-finding hearings, and directed several studies to determine how these crucial programs are serving California employees and employers. These studies, conducted by independent research organizations under contract with the Commission, and other activities were aided by the involvement of state agency personnel and interested members of the workers compensation community. This cooperative public-private partnership continues to work together to identify, describe, measure and propose solutions to problems and difficulties in the current health and safety and workers compensation systems.
Further information about CHSWC and its activities may be obtained by writing
to Commission on Health and Safety and Workers' Compensation, 455 Golden
Gate Avenue, 10th Floor, San Francisco, California 94102, by calling (415)
703-4220, or by faxing a request to (415) 703-4234. CHSWC information and
publications are also available at www.dir.ca.gov/chswc