THIS WEEK IN
Prepared by Norwood & Mattoch
Deal—What Deal?
This Week in
The Governor and legislators will return from their Easter recess on Monday. A “Big 5” meeting is scheduled for late afternoon or evening and, if everything goes right, a comprehensive deal on workers’ compensation reform could be announced.
If such a scenario develops, and it is a BIG “if,” legislative leaders have several options available if they opt to meet the Governor’s April 16 deadline to submit signatures for a workers’ compensation initiative to be placed on the November ballot.
The quickest route to enact a workers’ compensation
compromise would be to amend one or more of the several bills from last year’s
legislative session that are still scheduled to be heard before the workers’
compensation conference committee which has been dormant since last
session. The committee includes Senators
John Burton (D-San Francisco), Richard Alarcón (
One or more of these bills could be amended, voted on by the conference committee and then sent to each house floor for a vote before being sent to the Governor for his signature. However, the Governor’s office had previously committed to both Republican caucuses to have any workers’ compensation deal in print for at least 5 days prior to a vote. The idea was to provide business and insurance communities the opportunity to review any deal prior to committee hearings or a vote of each house. If Republicans insist on such a time frame, a vote would be delayed until next week and initiative supporters would be forced with delaying the submission of signatures or beginning a phased-in submission process.
Will There Be A
Deal?
The “Big 5,” primarily the Governor and Senate President Pro Tempore John Burton, were reportedly very close to a deal 10 days ago until Republican caucus representatives revolted after receiving a preview of a proposed deal. Since that time, tensions have run high between the Governor’s staff and the Republican caucus.
Additionally, a draft document was leaked to some representatives in the business community which also received a strong negative reaction. Some business representatives described the deal as worse than existing law on some topics. It was unclear, however, whether the draft was a current or more dated copy of what was being discussed.
Insurance rate regulation has also reemerged as a
centerpiece in what labor and Democrats are demanding as part of any workers’
compensation reform deal. However, the California Chamber of Commerce came out
strong against any insurance rate regulation fearing that any such provision
would only serve as a disincentive for insurers to commit capital to
Another big factor was concern raised by the California
Insurance Guaranty Association (CIGA).
CIGA is attempting to go to the bond market with approximately $1
billion of bonds in order to prevent the association from running out of money
this October. CIGA is currently paying
out $100 million per month to injured workers as a result of the insolvency of
27 workers’ compensation insurance companies.
However, the bond market is beginning to have the jitters due to the
size and role of the State Compensation Insurance Fund (SCIF) in the repayment
of these bonds. If a negative insurance
rate regulation bill further dampens the desire of private insurers to re-enter
the
All parties are preparing for various scenarios when
legislators return to
However, it is clear from the numbers that the initiative either got off to a very slow start in gathering signatures, or was being used by the Governor as a bluff with legislative leaders. With Democratic leaders having called the Governor’s bluff, efforts have gone into high gear and reportedly the campaign is on line to collect a sufficient number of signatures by the April 16 submission deadline.
Democrats are reportedly preparing a number of bill drafts for possible use. If no deal is agreed to between the “Big 5,” it is possible that Democrats will amend a bill or bills with their version of a deal and place them on the Governor’s desk. They can do so without any Republican votes. Already, Senator Richard Alarcón, Chair of the Senate Labor and Industrial Relations Committee, has scheduled a hearing today on his new insurance rate regulation bill. SBx4 16 would establish a workers’ compensation rate setting commission consisting of the Insurance Commissioner, the Attorney General and the Governor. This PUC-type of commission would be open to participation by interveners as well.
During this last 10 days, the Governors staff has had the challenge to try to find out what it would take to bring Republicans to a compromise. It will now be up to the Governor to see if he can close a deal with Democratic leaders; make a deal despite what might be Republican and business opposition; or roll the dice on a November ballot initiative.
Senior Financial
Abuse
Developing as a major issue is the topic of senior financial
abuse. Trust and Will mills, Medical
qualification scams, viatical investment issues and
abusive life insurance and annuity sales have become a growth industry in
SB 1273 (Scott) would allow district attorneys to charge insurance companies and agents who misrepresent the terms of an insurance policy or make any false statements to senior citizens for the purpose of inducing the sale, forfeit or surrender of a policy with a felony or a misdemeanor. Current law restricts the charge to a misdemeanor.
AB 2611 (Simitian) proposes to impose a mandatory duty on financial institutions to report to specified governmental entities any reasonable suspicion of elder financial abuse and suspected physical abuse, abandonment, abduction, isolation or neglect.
AB 2474 (Wolk) would require any person who provides financial services, including insurance agents, title insurance company officers and investment officers, who observe an incident that appears to be elder financial abuse to report the suspected incident to adult protective services or the local law enforcement agency.
AB 2316 (Chan) would establish the “Senior Protection Fund” by assessing up to $1 per each annuity or life insurance product sold in California. The money collected would be distributed to the Department of Insurance and the Attorney General’s offices for the investigation and prosecution of elder financial abuse cases.
AB 2783 (Simitian) would authorize,
upon the adoption of a resolution by the county board of supervisors, the
imposition of a fee of up to $2 to be paid at the time of recording of every
real estate instrument. The additional
fees would be placed in the Elder and Dependent Adult Financial Abuse
Prevention Trust Fund, to be expended to fund programs to investigate and
prosecute civil proceedings involving the financial abuse of seniors in the
context of fraudulent real estate transactions
17200 Initiative
Update
The Californians to Stop Shakedown Lawsuits reported this week that, despite incredible competition with other petitions, they have gathered approximately 650,000 signatures. This number exceeded their goal of 615,000 signatures and is enough to assure qualification for the November ballot. The coalition will begin submitting the signatures to various counties today.
With qualification essentially assured, the campaign fundraising is going into high gear. To date, the campaign has raised over $2.6 million and have commitments for another $5 million. The goal of the campaign is to raise another $6.4 million in the next few months. This additional money will be for advertising time. Given the number of measures slated to be on the ballot in November, advertising time will be limited and very expensive.
For more information on the initiative, please visit www.stopshakedownlawsuits.com.
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