Calif. Moves To Continue Surcharge

By Caroline McDonald

NU Online News Service, May 2, 10:09 a.m. EST? The California State Assembly Insurance Committee yesterday approved a measure that continues the two percent surcharge on workers' compensation insurance premiums in California to protect the California Insurance Guarantee Fund.

By an 18-0 vote, the panel voted to release AB 2007, sponsored by Committee Chairman Tom Calderon, D-Montebello. His bill makes permanent the two percent assessment, which was increased from one percent last year.

The bill "brings California in line with other states in the country," said Nicole Mahrt, director of public affairs for the American Insurance Association in Sacramento. "This is an important bill, so that workers get their benefits paid and employers have their contracts honored."

Since last year's surcharge legislation, four companies have entered insolvency, Reliance being the largest, according to the fund. Since Reliance was liquidated in October 2001, CIGA has paid $28 million in workers' comp claims for that company, CIGA said.

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