According to Director Carrie Nevans, the division is proposing to change the formula it uses to determine payments to workers who suffer permanent disability on the job. The changes are based on new data that links wage losses to the type of injury suffered by the worker, said Nevans.
The formula calculates payments to disabled workers based on estimates of how much they would earn if they weren't permanently injured. The adjusted formula is based on a review of how wage losses relate to injuries under the workers' compensation formula in use since 2005, Nevans said in a statement. The proposed changes would bring larger increases for workers who suffer the highest wage loss, and increase benefits for some of the most common and serious injuries like those to the back, wrist, hand and ankle, Nevans said. The proposed formula would also eliminate age as a factor in setting benefits.
California officials are rebuilding the fund’s management and operations as a result of criminal investigations and administrative reviews of alleged past mismanagement and questionable expenditures of hundreds of millions of dollars.
In 2006, the top five writers of workers’ compensation insurance in California, according to A.M. Best Co. state/line data, were: State Compensation Insurance Fund, with a 31.8% market share; Berkshire Hathaway Insurance Group, 9.1%; American International Group Inc., 9%; Zenith National Insurance Group, 5.1%, and Travelers Insurance Cos., 3.9%.