Measure Would Let Tribe Sell Insurance

A small Indian tribe in Owens Valley is going to the Legislature to win state approval of its business selling cut-rate workers’ compensation insurance.

Assemblyman Bill Maze (R-Visalia) introduced a bill Friday that would provide state sanction for the 74-member Fort Independence tribe’s sale of workers’ compensation coverage.

State officials claim the policies are illegal because they don’t comply with California insurance and labor laws. The Inyo County tribe says it is recognized by the federal government as a sovereign nation and can’t be regulated by the state.

The tribe and its business consultants also say they provide an alternative to expensive state-regulated workers’ compensation by “leasing” employees to businesses hundreds of miles from tribal reservations. The tribe’s system, they say, saves employers money by providing insurance at much lower rates than what’s available through state-regulated insurers or through the state-run insurance pool.

If it wins state approval, the insurance sold by the tribe could go a long way toward shrinking the $29-billion annual cost of workers’ compensation in California, Maze said.

“As the governor has indicated, we ought to be thinking outside of the box,” the assemblyman said.

State Insurance Commissioner John Garamendi said he had no quarrel with Indian insurance companies as long as they were willing to submit to regulation by his department. He said the Indian-issued policies could put injured workers at a disadvantage by forcing them to take claims to tribal councils.

“You don’t cut down on legal costs by denying an injured worker his day in court,” Garamendi said.