Monday, October 26, 2009, 10:31 PM - Political developmentsHe's baaaaak!
Not that he really ever left.....
That's Maurice Greenberg, who as chairman of A.I.G. presided over the rise of an insurance behemoth.
A.I.G. is everywhere. Several months ago while walking in Shanghai on the banks of the Huangpu River, by "The Bund" (an area that was one of the foreign "concessions" established by the Treaty of Nanjing after the First Opium War), I happened upon the A.I.G. China office. A.I.G. was very active in Asian markets; founder C.V. Starr, a Fort Bragg and Cal Berkeley native, was said to have been an operative of the OSS, predecessor to the C.I.A.
Here in our state, A.I.G. has long been a major player in the California workers' comp market, with its various subsidiaries.
Greenberg's sons are heavy hitters in the industry. One son was chairman at Marsh & McLennan. The other son, Even Greenberg, is the CEO of Ace. Both these insurers have had a significant presence in the California comp market.
Greenberg was pushed aside by the A.I.G. board. At the time, Greenberg was being pursued by then Governor Eliot Spitzer. That was, of course, before Spitzer's penchant for call girls came to light. Greenberg is still being pursued in various civil suits.
A.I.G. imploded in 2008 as its various involvements in arcane financial products crashed and burned.
Historians and economists may be debating for years why Lehman was allowed to fail but A.I.G was saved. But saved it was. By you, dear taxpayer. It was deemed an enterprise too big to fail, with connections to the major corporate and political players in the world.
The various state-regulated A.I.G. subsidiaries continued to pay workers comp claims. Despite fears in late 08 it would all melt down, it's largely been business as usual in workers' comp.
Greenberg, in his 80s, has been reassembling his team.
You the taxpayer now own a majority stake in the old A.I.G., which has been on a mission to restructure itself.
But Greenberg is now competing with your company. He's luring talent from the Uncle Sam-rescued firm for his C. V. Starr company.
One of Greenberg's divisions is C.V Starr California:
And you thought the insurance business was straightforward.
Here's an interesting profile that appears in today's New York Times:
http://www.nytimes.com/2009/10/27/busin ... ig.html?hp
And the painted ponies go up and down in the circle game.......
Sunday, October 25, 2009, 10:39 PM - Political developmentsCould it be that we're in an economic recovery cycle that sheds jobs on the rebound?
A weak dollar, a weak housing market, and a gloomy jobs picture are all significant pieces of the conundrum we're in.
8 million jobs....yes, Eight Million.....have been lost in the economic cycle that started some time ago.
And as new high school and college kids join the workforce, jobs aren't being created for them.
Here's a good article from the San Francisco Chronicle on the job-loss trend which continues unabated:
http://www.sfgate.com/cgi-bin/article.c ... 1A9PMQ.DTL
(the comments to the article are worth reading as well....)
I've recently seen a number of clients laid off. Some were injured workers who were back to work before getting a layoff notice. Others received layoff notices while on TTD. Contrary to popular myth, that's not illegal per se, unless the worker can demonstrate employer motivation or differing treatment that would constitute a Labor Code 132a violation.
And some spouses of disabled workers are being given less hours in their jobs. As a result, a two earner family may be reduced to one income (after TTD and SDI run out), and then to less than one income due to reduced hours. That's a path to bankruptcy and financial ruin for many folks.
Those of us lawyers and claims professionals in the comp system would do well to ponder all of this from time to time.
Some of us are so focused on the workers'c comp case law developments and the minutiae of our practices that we can easily forget the big picture of how scary it is for many workers out there on the street.
As the national unemployment rate marches on to the 10% "tripwire" noted by some commentators, and as the unemployment rate in some California cities and counties goes over 20%, it's time to see this as a crisis.
It's not a Democratic or a Republican crisis. It's a national crisis. If a generation of young people find little or no opportunities (as in Japan's 1990s "Lost Generation"), we'll see the social consequences for decades.
We're talking the American Dream here.
Many of my colleagues have young adults in their families-as do I.
Giving these young adults excuses for partisan bickering and gridlock isn't going to cut it.
It's not always clear that the political class in the country-on both sides of the aisle-is prepared to consider sacrifices for the good of the workforce. We're going to have to re-envision the ways we do many things. Sacred cows will be sacrificed.
Ten years from now the Limbaughs and Olbermanns may be gone.
But will we then have an industrial policy that gets people back to work? Will we invest in our people? Will we figure out a way to work on our infrastructure? Will we make some hard choices to get our deficits under control and salvage the value of our currency?
Without workers, there'll be no workers' compensation. And without getting a handle on this, we really will be on the road to being a Banana Republic.
Thursday, October 22, 2009, 09:48 PM - Political developmentsIn recent months there was a flap over discussions held between a handful of CHSWC members and some comp system stakeholders.
Those discussions, memorialized in a draft on CHSWC letterhead, came to light in the workers' comp press and on an Assembly Republican site. Efforts to achieve a "grand bargain" re-reform stalled (or went into deep underground).
The fruits of those discussions will be uncloaked soon.
CHSWC voted today to release information on the document developed with CHSWC staff support.
Apparently the Department of Industrial Relations has asked that the information be published.
In response to questions from CHSWC member Robert Steinberg, CHSWC staff member Lachlan Taylor noted that "It does exist".
Steinberg noted that it was not a CHSWC report and that the document that has made the rounds in public was more of a political document than a CHSWC study.
Taylor noted that a good deal of work had gone into it.
CHSWC member Angie Wei (from the California Labor Federation) noted that the DIR probably wants it released to build a public process around the substance of the document.
I'm sure that's correct. The DIR is under pressure to fulfill its statutory obligation to revise the 2005 PDRS.
Commissioner Cathy Aguilar (claims manager for the San Francisco Unified School District), voiced her opinion that the people who undertook the negotiation are to be commended.
Wei mused that she does not understand how one can negotiate in public.
As the document surfaced several months ago, however, there was puzzlement among many observers over how part of the commission was involved in the effort with the help of its staff at a time its executive director disavowed knowledge of it all to the workers' comp press.
The CHSWC research function appeared to be blended with dealmaking, creating some staff usage and PR problems for the commission and some potential open-meeting rule issues.
Maybe all's well that ends well. This observer is happy to see all ideas on the table that can be considered for a better system.
Also endorsing a more open process is Publius, a commentator in the Workers Comp Executive. In a October 21, 2009 column, Pubilus notes that "If anything positive came from the end-of-session drill this year, it should be that all affected parties need to be at the table, or should at least have an opportunity to present their perspective to ultimate decision makers".
The wise Pubilus notes that:
"The "if I tell you I'll have to shoot you" cloak-and-dagger style historically has produced poor results, especially when it has to do with providers. Like it or not, the system doesn't function very well when providers are simply told "this is what is going to happen to you, so live with it".
So when the CHSWC document is uncloaked (by the December meeting, I was told by Lachlan Taylor), perhaps it can serve as a valuable document to stimulate studies and discussions about where the system should go.
An open discussion would be good, with eventual legislative hearings on the problems in the system. Perhaps that should wait until a new governor's tenure.
Here's a link to earlier posts on this topic:
http://workerscompzone.com/index.php?en ... 830-165536
"Open to Making a Deal?"
http://workerscompzone.com/index.php?en ... 910-074622
Stay tuned. In coming posts I'll be covering a RAND study on possible medical cost savings, the Legislative Analyst Office report on Almaraz-Guzman, and a host of other issues.
Meanwhile, on the Potomac, there's word that Harry Reid may push the "public option" on the Senate side:
http://www.nytimes.com/2009/10/23/healt ... r=1&hp
Wednesday, October 21, 2009, 09:52 PM - Political developmentsWhere can you always find the workers comp wonks and some of the "playas" who move and shake the system?
As Cheez Whiz, of course. The Commission on Health and Safety and Workers Compensation.
Tomorrow will be no exception. There's a public meeting at the State Building in downtown Oakland.
Here are some of the topics up for discussion, with links to some of the studies:
Regulatory actions to control medical costs, a RAND Corp paper:
Hospital ER services furnished under California workers' comp (another RAND paper by Barbara Wynn:
http://www.dir.ca.gov/chswc/Reports/200 ... rvices.pdf
There will also be a briefing by UC Berkeley's Frank Neuhauser on "Comparing Administrative Overhead Between Medical Treatment Under Workers' Compensation and Health Insurance-Could Integration Pay for Covering the Working Uninsured?"
Sounds interesting. But on the national level any effort to blend workers comp and group health into 24 hour coverage has no legislative traction. It's barely on the radar. If there's going to be 24 hour coverage, it would have to start at the state level. Given the current Sacramento political stalemate over pretty much everything, it's a tough sell no matter how brilliant the concept.
The meeting starts at 10 at the auditorium at 1515 Clay in Oakland.
Workerscompzone will be there for you.
Monday, October 19, 2009, 10:58 PM - Political developmentsOne thing many comp stakeholders can agree on is that far too many employers are skirting the legal requirement that they be covered for workers comp.
Employer fraud by scofflaw employers who seek to avoid paying comp premiums has been a growing problem. Those employers gain an unfair competitive advantage. And they may be forcing employees to seek medical treatment at public facilities, burdening the taxpayer.
Here's a link to my post "It's the Employer Fraud, Stupid":
http://workerscompzone.com/index.php?en ... 818-110358
That's why it's heartening to see that SB 313 has passed the California Senate and is on its way to Governor Schwarzenegger.
SB 313 would increase penalties against employers who fail to secure comp insurance. Employers without insurance would be liable for the greater of 2 times what their premium per employee would have been or per-employee penalties of $1500, going back as much as 3 years.
Thanks are due to Sate Senator Mark DeSaulnier for his work on the bill. Also deserving recognition is Scott Hauge of Small Business California, the bill's primary sponsor.
It would seem likely that the Governor will sign this one. Let's hope so.
Here's a link to the bill:
http://www.leginfo.ca.gov/pub/09-10/bil ... rolled.pdf