Apr 25, 2005 - 06:15 PM
Work Comp Donations to Arnold Paying Off
by Douglas Heller
The state's workers' compensation insurers have reaped a windfall in the wake of Arnold's workers' compensation law signed last year, according to new insurance industry data made public at a California Dep't of Insurance hearing today. Only 45 cents of every dollar California businesses paid in premium in 2004 was used to cover claims of injured workers. The most recent national average was almost 73 cents of every dollar. That dramatic difference means overpriced policies for businesses and adds up to huge profits for insurance companies in California.
Last year, Arnold refused to consider regulation of insurance companies while pushing his workers' comp bill. And just as the gov was facing pressure to regulate insurers as part of a legislative solution, he received a $100K donation from American Financial Group -- one of the largest workers' comp insurers in California. That always helps a politician figure out what he believes. In total, he received more than $550,000 from workers' comp insurers before he signed the law.
And now that Arnold's bill is paying off for insurers, American Financial Group and its Great American Insurance subsidiary are writing checks. Last month AFG's chairman, Carl Lindner, hosted a fundraiser for Arnold in Cincinnati and donated another $279,200 this year to Arnold and his various campaigns.
Lindner, who owns major league baseball's Cincinnati Reds -- the Reds' stadium is even named Great American Ballpark after Lindner's insurance co. -- hit a homerun with the money he paid to get Arnold on the company team.