New Directions for California

I am pleased to see The Times taking such a proactive editorial position on reversing California’s negative business climate (“California Has Got to Stop Shooting Itself in the Foot,” Sept. 23). But, I must make note of The Times’ erroneous perception of rising costs in the state’s worker’s compensation system.

Everyone agrees there should be changes in the worker’s comp system, but experts contend that the most beneficial and cost-efficient changes will include a return to fundamentals, the elimination of the minimum insurance rate law and an emphasis on workplace safety and prevention of on-the-job injuries.

Under California’s archaic minimum insurance rate law--a system which prohibits rate adjustments below the minimum rate but permits rate increases without regulatory oversight--businesses throughout the state are forced to pay excessively high premiums while insurance companies reap the profits. By establishing an arena of free market competition among insurers in this state, safety programs and financial incentives could be enhanced and employers who work to reduce and prevent injuries could be rewarded with real cost savings.

J. ANDREW McKENNA, President, California Applicants’ Attorneys Assn., Sacramento