BILL NUMBER: AB 1513	INTRODUCED
	BILL TEXT


INTRODUCED BY   Committee on Insurance

                        MARCH 5, 2015

   An act to repeal Section 77.7 of the Labor Code, relating to
workers' compensation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1513, as introduced, Committee on Insurance. Workers'
compensation: studies.
   Existing law establishes a workers' compensation system,
administered by the Administrative Director of the Division of
Workers' Compensation, to compensate an employee for injuries
sustained in the course of his or her employment.
   Existing law requires the Commission on Health and Safety and
Workers' Compensation to undertake a specified study examining the
causes of the number of insolvencies among workers' compensation
insurers to be conducted by an independent research organization, and
requires the commission and the Department of Industrial Relations,
no later than July 1, 2009, to publish the report of the study on its
Internet Web site and to inform the Legislature and the Governor of
the availability of the report.
   This bill would repeal these obsolete workers' compensation study
requirements.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 77.7 of the Labor Code is repealed. 
   77.7.  (a) A study shall be undertaken to examine the causes of
the number of insolvencies among workers' compensation insurers
within the past 10 years. The study shall be conducted by an
independent research organization under the direction of the
commission. Not later than July 1, 2009, the commission and the
department shall publish the report of the study on its Internet Web
site and shall inform the Legislature and the Governor of the
availability of the report.
   (b) The study shall include an analysis of the following: the
access to capital for workers' compensation insurance from all
sources between 1993 and 2003; the availability, source, and risk
assumed of reinsurers during this period; the use of deductible
policies and their effect on solvency regulation; market activities
by insurers and producers that affected market concentration;
activities, including financial oversight of insurers, by insurance
regulators and the National Association of Insurance Commissioners
during this period; the quality of data reporting to the commissioner'
s designated statistical agent and the accuracy of recommendations
provided by the commissioner's designated statistical agent during
this period of time; and underwriting, claims adjusting, and
reserving practices of insolvent insurers. The study shall also
include a survey of reports of other state agencies analyzing the
insurance market response to rising system costs within the
applicable time period.
   (c) Data reasonably required for the study shall be made available
by the California Insurance Guarantee Association, Workers'
Compensation Insurance Rating Bureau, third-party administrators for
the insolvent insurers, whether prior to or after the insolvency, the
State Compensation Insurance Fund, and the Department of Insurance.
The commission shall also include a survey of reports by the
commission and other state agencies analyzing the insurance market
response to rising system costs within the applicable period of time.

   (d) The cost of the study is not to exceed one million dollars
($1,000,000). Confidential information identifiable to a natural
person or insurance company held by an agency, organization,
association, or other person or entity shall be released to
researchers upon satisfactory agreement to maintain confidentiality.
Information or material that is not subject to subpoena from the
agency, organization, association, or other person or entity shall
not be subject to subpoena from the commission or the contracted
research organization.
   (e) The costs of the study shall be borne one-half by the
commission from funds derived from the Workers' Compensation
Administration Revolving Fund and one-half by insurers from
assessments allocated to each insurer based on the insurer's
proportionate share of the market as shown by the Market Share Report
for Calendar Year 2006 published by the Department of Insurance.
   (f) In order to protect individual company trade secrets, this
study shall not lead to the disclosure of, either directly or
indirectly, the business practices of a company that provides data
pursuant to this section. This prohibition shall not apply to
insurance companies that have been ordered by a court of competent
jurisdiction to be placed in liquidation under the supervision of a
liquidator or other authority.