Saturday, November 27, 2010, 02:04 AM - Political developmentsWorkerscompzone is traveling, and in some coming posts will be offering up some sights and sounds from the road......
Here in Hong Kong there's a virtual laboratory of global migration.
On Kowloon's Canton Road, upscale mainland Chinese wait patiently in line outside Chanel, Louis Vuitton,and Hermes, as the stores are so crammed that they ration entry. With rolling suitcases in tow, these Chinese entrepreneurs, new winners in the global commerce shuffle, await a chance to grab a bit of luxe.
In a few hours they'll emerge, suitcases full.
Meanwhile, across Hong Kong harbor, on Hong Kong Island, at "Central", different sorts of bags are being stuffed. Here, in the shadow of some of the world's tallest buildings, are thousands of Filipinas on a Sunday afternoon.
Sunday is their day off from the domestic work most of them perform here for Chinese families. They come to Central to socialize and network. And some come to fill up plaid plastic totes and Balikbayan boxes with items they've sourced in HK to ship back to the Phillipines along with remittances.
Later in the day, on the other side of Hong Kong island, one can visit Stanley and Aberdeen, remnants of the British control of the treaty port.
In Stanley stall vendors sell T-shirts featuring images of Obama in a Mao jacket and Mao hat.
In nearby Repulse Bay, villas sit perched on steep hillsides. Upslope sit massive condos, some of the world's most expensive real estate per square foot, with 1,500 sq. feet going for upwards of $3 mil.
Kenyan twentysomethings hop on the double decker bus, cooling their heels for a day before heading to Guangzhou in a few days. There they'll contract for loads of merchandise, including knockoffs of those Parisian brands, all of which will be made in various Asian small factories and workshops, and shipped out to Nairobi.
As night falls, Kowloon yields up a cafe with wi-fi, its walls hung with large pull down maps that were so popular in American schools 50 years ago.
As night draw to a close, walking down darkening streets, some shopkeepers defy time. Shopkeepers beckon even at 1 am, as if they were desperate to make that lost sale, that last sale. Failure is not an option.
This world is a long way away. But it's the world we live and compete in today.
Tuesday, November 23, 2010, 09:40 PM - Political developmentsIf insurers were expecting some love from Insurance Commissioner Poizner, they got a bunch of dead roses instead.
Twice in 2009 Poizner swatted down insurer requests for hefty increases in the advisory workers' comp rate, known as the "pure premium rate".
But like the characters in Night of the Living Dead, the WCIRB's board came back in front of Poizner in October, arguing for a 27.7% rate increase.
Could it be time for some personnel changes at the WCIRB? One might think so. Trotting out a 27.7% increase and trying to sell it with a tepid performance at the rate hearing wasn't exactly the WCIRB's finest moment.
And shortly thereafter the WCIRB's position was undercut as SCIF's rate increase was announced at a much, much lower level.....5.2%.
So the WCIRB gets the dead roses again, and the Commish leaves office speaking up for beleaguered California employers.
Here is part of a statement released by Poizner:
"Following a hearing on workers' compensation rates in June 2009, Commissioner Poizner released a report detailing 27 available but underused efficiencies (attached below) insurers should use to control costs. Commissioner Poizner has consistently instructed insurers that until they demonstrate that they are implementing these changes, he would not consider a rate increase."
"Since 2008, the actual premium paid by California employers increased by a modest 3%. During that same period, insurer filings with CDI claimed a 36% average increase in claims costs. Widespread discounting based on employer experience and other market factors has negated that increase, stabilizing employer costs. Poizner characterized this development as positive and as an indication that California's competitive market is keeping workers' compensation rates under control."
"Commissioner Poizner also announced his decision to implement three reforms that will significantly improve and inject transparency into the review process. The reforms require the WCIRB to:
Calculate future advisory pure premiums based on insurers' actual filed rates rather than on theoretical previous Benchmark numbers. Commissioner Poizner noted that under this approach, the current filling would actually have sought a rate decrease.
In addition to industry average numbers, include in each future rate filing a table showing the proposed change for each individual worker classification, allowing employers to better understand the specific impact the filing could have on them;
Use Department filing information and data from the WCIRB to evaluate overall workers' compensation insurer profitability. This will enhance regulators' ability to monitor the health of the workers' compensation system and make it easier for consumers to understand insurance pricing."
"The workers' compensation rate-making system is long overdue for some much-needed reforms," Commissioner Poizner said. "The benchmark rate is only theoretical, and this has enabled insurers to file for and pass on rate increases to businesses. I will not allow this broken rate-making process to serve as cover for the insurance industry in its justification for higher rates that are simply not justified."
You can find Poizner's 2009 report on controlling workers' comp cost drivers by clicking here:
http://www.insurance.ca.gov/0400-news/0 ... arkRpt.pdf
To find Poizner's decision on the 2010 proposed 27.7% rate increase, click here:
http://www.insurance.ca.gov/0400-news/0 ... CISION.pdf
http://www.insurance.ca.gov/0400-news/0 ... CISION.pdf
Over the coming few years the industry is likely to see itself under even more scrutiny by incoming Insurance Commissioner Dave Jones.
If the industry believes rates need to rise, carriers will have to live with their own pricing decisions.
What we've seen over the last few years is that employers have the upper hand. Carriers cannot expect an insurance commissioner to hand the insurance industry a gift of political cover for rate increases.
Poizner has now pointed the way to a new day in looking at premium rates: looking at overall carrier profitability and looking at actual rates charged.
Thursday, November 18, 2010, 09:58 PM - Understanding the CA WC systemIf you've yet to check out my other venture, thecompguys.org, now's a good time to do so.
Collaborating with prominent workers' comp defense attorney Richard Jacobsmeyer, I'm doing a talk show format that features commentary on California workers' comp developments.
Our latest segment focuses on October/November 2010 Workers' Comp Update. Here's the link:
And here's the link to a just-recorded segment on medical provider networks (MPNs):
Wednesday, November 17, 2010, 09:58 PM - Political developmentsIt's understandable that California leaders are grasping at straws in an effort to identify revenue to stanch the bleeding in a budget that may be $26 billion in arrears.
But selling some of the prime real estate where California does business is not the answer.
Those buildings that may be sold include state buildings in Los Angeles, Oakland, San Francisco and Santa Rosa that house WCAB district offices.
This sale would increase long term costs to the state. The sale does nothing to achieve the mix of revenue increases and program terminations that will be inevitable in any long term fix.
Opposition has surfaced. There's now a lawsuit trying to block the sale.
Filed by the Burlingame firm of Cotchett, Pitre and McCarthy, the suit seeks to nix the sale, which is set to close in mid-December (disclosure here: my son works at the Cotchett firm, but isn't involved in the case).
Why should our state sell off its prime properties only to face escalating rental costs for properties which are absolutely necessary for the core process of governing?
It's stupid, and it's sad.
Monday, November 15, 2010, 10:03 PM - Political developmentsAs if it weren't enough that the good folks in Las Vegas attacked California in an ad campaign last year, we find now find ourselves under the microscope again.
This time it's from the land of Duck and Beavers, Oregon.
Instead of a catchy TV campaign to lure business to the collapsing heap that is Vegas, Oregon dresses up its come hither look in a policy paper.
That would be the "2010 Oregon Pure Premium Rate Ranking Survey".
On the measures cited in that study, California is a high-cost workers' comp state, among a handful of states with workers' comp costs at $2.50 or above per $100 of payroll. The study claims that California is now fifth highest in costs, up from 9th in 2009.
Those costs, of course, have little or nothing to do with the recent Guzman and Ogilvie decisions. The significant cost driver in California workers' comp has been growth in the cost of medical treatment and expenses associated with medical cost containment efforts such as utilization review.
But these Oregon-collected stats are sure to be cited as Governor Brown and the legislature are asked to look at further comp reforms.
It's one more reason why knowledgeable folks in the comp community hope for gradual positive changes, but don't expect grand or dramatic fixes.
You can see the Oregon study here:
http://www4.cbs.state.or.us/ex/imd/repo ... D=FEARA012
Stay tuned. And check back in a few days for a link to two recently recorded segments on thecompguys.org, the YouTube based series I do with defense attorney Richard "Jake" Jacobsmeyer.