It was designed to "stop the overwhelming rate of insolvent insurance companies leaving thousands of employers without workers' compensation coverage, and injured workers forced to receive benefits through the California Insurance Guarantee Fund," Mr. Calderon said in a statement with the bill.

The measure, which still must go through the Senate Insurance Committee and the Senate floor, allows the commissioner to disapprove rates that the department believes would be "inadequate, unfairly discriminatory, or tend to create a monopoly in the marketplace," according to the statement.

Keith Bateman, vice president, workers' comp-health for the Alliance of American Insurers in Downers Grove, Ill., said the AAI continues to oppose the bill in its present form.

"We understand the department's concerns but we don't believe that AB 1985 accomplishes what the department says it desires to accomplish," he said. "We believe the bill has some technical flaws.

Fundamentally, he continued, "we don't believe you can regulate solvency by only looking at price, but we're willing to continue discussions with the department on how the bill can be improved."

Sam Sorich, vice president and Western regional manager for the National Association of Independent Insurers said that, "NAII continues to oppose AB 1985 because we believe that the existing law already provides the insurance commissioner with sufficient authority to prevent insurers from charging inadequate rates."

In the past, he continued, commissioners have "not exercised this authority and we are not convinced that the provisions in AB 1985 are needed to motivate the commissioner to exercise authority that is already in place."

NAII is troubled by additional filing requirements which would be impose on insurers, he said. "Smaller carriers will find it especially difficult and expensive to comply with these requirements. The filing requirements will put them at a competitive disadvantage with larger carriers."