Industry Group Says Garamedi Will Force Disability Insurance Rates Up

The Association of California Life and Health Insurance Companies, America's Health Insurance Plans, the American Council of Life Insurers and the California Chamber of Commerce filed a complaint against Insurance Commissioner John Garamendi, saying that Garamendi's proposed restrictions on disability insurance policies will drive up premiums by as much as 43 percent.

The groups claim that Garamendi's restrictions, which would not permit the sale of policies that require someone collecting disability benefits to get appropriate medical care, eliminate the coordination of disability insurance benefit payments with Social Security payments and expand the definition of disability.

"California employers already pay some of the highest disability insurance rates in the country," said Brad Wenger, president of the ACLHIC. "If these proposed requirements are enforced, it will be even more difficult and expensive for employers to provide disability insurance protection to their employees. This is one more example of how excessive regulation adds to the cost of doing business in California."