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News: 2011 Press Release
For Release: September 6, 2011
Media Calls Only: 916-492-3566
Insurance Commissioner Dave Jones Announces Passage of Bill to Make Workers' Compensation Policies More Transparent
Commissioner Urges Governor to Sign SB 684 into Law
Insurance Commissioner Dave Jones today announced that the California State Legislature passed SB 684, which makes workers' compensation policies more transparent and ensures a fair and transparent process for arbitration proceedings. The measure, which received bipartisan support, was sponsored by the California Department of Insurance and authored by Senate Majority Leader Ellen Corbett (D-San Leandro). The bill provides that employers must be notified in writing and allowed to negotiate when an insurer intends to use arbitration to resolve disputes with the employer. The bill also gives a right to the employer to decide whether to negotiate and resolve arbitration disputes in California and/or under California law.
"This bill will create an important protection for California's employers by no longer allowing insurers to force businesses, small and large, to arbitrate out of state without their foreknowledge and consent," said Commissioner Jones. "SB 684 will ensure that both employers and insurers both freely and mutually agree to terms of the workers' compensation policy."
When an insurer provides a quote for a workers' compensation policy, the employer may not necessarily know that there are certain specified conditions associated with that quote. In order to provide a lower quote, an insurer will often require terms for arbitration to take place out of state under another state's law. SB 684 would require that employers be notified up front when they receive a quote that they can negotiate the dispute resolution provisions, particularly whether or not to arbitrate out of state and under a law other than California. If the employer decides to accept that quote, a signature will be required on the disclosure to indicate that they understand and accept the terms of the agreement.
"I urge Governor Jerry Brown to sign this bill which is aimed at making sure that businesses are protected as we continue to face an uncertain economy," said Commissioner Jones. "This disclosure will help to make the negotiation process more transparent from the beginning for everyone involved, including for the insurer."
The provisions laid out in SB 684 shall apply to workers' compensation policies issued or renewed on or after July 1, 2012.
Please visit the Department of Insurance Web site at www.insurance.ca.gov. Non media inquiries should be directed to the Consumer Hotline at 800.927.HELP. Callers from out of state, please dial 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.
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