FLASH REPORT: Garamendi Keeps Injured Worker's Payments Flowing
In a dramatic last minute save California Insurance Commissioner
John Garamendi approved a request from the California Insurance
Guarantee Association for inter-account borrowing to pay workers'
comp claims from its other lines funds. In addition, Commissioner
Garamendi is acting to save the state's employers from increased
CIGA is running short of funds because the failures of so many
California workers' comp carriers. Cash shortages are generated
by delays in recovery of assets and the failure of other states
to cooperate. Larry Mulryan, it's well respected Executive Director
calls the situation an "acute financial crisis."
In the long term CIGA says it is due to run completely out of
cash in its workers' comp fund sometime during 2004. It has requested
that the Commissioner approve and encourage the legislature to
amend the law to permit CIGA to sell revenue bonds to cover the
shortages rather than increase the current 2% policy assessment
Mulryan was making personal calls to carriers asking them to
pay the balance of their 2002 installments in order to cover next
weeks funds requirements when Commissioner Garamendi approved
the change in procedures.
Reprinted from: BULLETIN FLASH REPORT, WORKERS' COMP EXECUTIVE,
Friday, May 16, 2003