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By signing a worker's comp
"reform" law that failed to provide any regulatory controls over the
insurance companies that have been jacking up California businesses'
premiums in recent years, we thought Arnold had done all he could to
repay the workers' comp insurers that donated over half a million to
his campaigns. Perhaps we underestimated his allegiance to the special
interests.

Earlier this week, the Gov, named Jeanne Cain to be the new Chairwoman
of the State Compensation Insurance Fund, commonly known as the State
Fund (the state's publicly managed workers' compensation insurance
company). Ms. Cain, who like so many of Arnold's appointees, comes
straight from the ranks of the Sacramento lobbying corps, is the third
Chamber of Commerce lobbyist the Gov has brought into his
administration. More notably, however, Cain is a former Vice President
of the American Insurance Association (AIA).

The AIA, which met privately with Schwarzenegger in DC last February,
was very active in the workers' comp debate and must love the idea of
having one of their own overseeing the State Fund. Because of its huge
share of the workers' comp insurance market, the State Fund sets the
bar for premiums in California and if its premiums are kept high, the
unregulated insurers will have cover for keeping their premiums above
what's reasonable. Last year, according to industry data, profits in
the insurance industry were up as much as 1000% with many of
California's workers' comp specialists gaining triple digit profit
increases. With Arnold putting Cain in charge of the State Fund, the
workers' comp market must be looking more and more like the Garden of
Eden to the insurers.