By Julius Young

Tuesday was Steve Poizner's day in the limelight.

As California's Insurance Commissioner, Poizner presided over the California Department of Insurance's hearing on the recommendation of California's Workers' Compensation Rating Bureau (WCIRB) that the "pure premium rate" for comp coverage be raised by 23.8%

I attended the morning hearing session in San Francisco. More about the substance of the hearing later. But first, some breaking news on Poizner's announcement.

The big news is that Poizner did not take the WCIRB's bait. According to a Department of Insurance press release, Poizner has rejected the WCIRB's projected rate increase call (Note: carriers are free to price their comp insurance rates as they see fit, since the pure premium rate is advisory anyway).

I received the e-mail notice of the press release just after 1 p.m. Tuesday, so it appears that it did not take Poizner long to make up his mind on the WCIRB recommendation. Indeed, testimony was still continuing when I left the meeting about noon, so by my math it appears that the press release was probably prepared before the hearing started.

Whether you're for or against the rate increase, that strikes me as a bit strange. After all, the hearing involved complicated and controversial issues, all seen through actuarial assumptions. But the Poizner press release would appear to have been fashioned beforehand.

If I'm wrong, I'll stand corrected by one of my readers. Perhaps they had prepared multiple press releases for every conceivable conclusion. Possible, but doubtful.

As I've noted before, this current comp rate issue is a big test for Poizner, who has had little on his plate that is as high profile as this issue.

Giving Poizner credit, he presided over the meeting well and asked some very incisive questions. He's clearly bright and capable.

On the downside, in the questions and remarks I heard from Poizner, I heard nothing that indicated great concern for the plight of the injured worker. His focus seemed to be on how the rates would affect jobs and the California economy.
That's important, and worker advocates who ignore the relationship between jobs, the economy and comp are perhaps tone deaf.

But it would be great to hear some more empathy from Poizner about the situation of disabled workers and more concern over whether the system is providing adequate benefits. (In fairness, it should be noted that I had to leave the hearing at 12:15 p.m. and so did not hear all of Poizner's remarks).

Even if he doesn't care, the winds of politics will require that he project more empathy. A major question swirls around this guy's candidacy: Whether he can connect with ordinary folks who comprise the California electorate.

In a somewhat awkward interchange, Poizner appeared to give Michael Nolan, president of the California Workers Compensation Institute, a hard time over whether CWCI is "licensed." Nolan handled that interchange with aplomb, noting that a wide range of comp think tanks (RAND, CHSWC, etc.) collect and share comp data. I wound up wondering whether others in the room saw that "license" interchange as quite strange. But hey, I'm just a blogging attorney......

Back to the press release....

Poizner rejected the portion of the rate increase request attributable to projections of increased permanent disability costs as a result of the recent Almaraz/Guzman and Ogilvie decisions. In doing so, he noted that the decisions are not final and may be reversed. In remarks in the morning session, he indicated that the Department of Insurance would be filing a brief on the issue (I was not clear whether the "brief" will be with the WCAB or just in later appeals likely to come in Almaraz/Guzman/Ogilvie).

Poizner has called for a second hearing on June 8, in Sacramento. The hearing is to focus on medical treatment cost issues.

Strategically, this is probably smart. Medical costs do appear to be driving increased comp expenditures. This includes substantial increases in pharmaceutical costs, medical cost containment expenses, and medical-legal costs.

I'll be blogging much more on medical treatment costs during the coming months, as the issue remains under the regulatory microscope. Ultimately, Poizner has no say over how treatment cost issues are handled.

That's the province of the DWC (which has already hammered out most of the treatment guideline regulations) or the legislature.

But the June hearing gives Poizner another day in the limelight, in Sacramento, where he can show his gubernatorial bonafides. Of course, the legislature could hold its own hearings.

The pure premium rate increase will have to wait...

Stay tuned.

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Julius Young is an applicants' attorney with Boxer & Gerson LLP in Oakland. This column was reprinted with his permission from his blog, http://www.workerscompzone.com
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