News and Press Releases for April 2007

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4/01/2007

Governor Lays Out Markers on Worker' Comp Reform

Governor Says True Reform Needed to Keep South Carolina's Business Climate Competitive

Columbia, S.C. - In light of the Senate's upcoming floor debate on workers' compensation reform expected this week, Gov. Mark Sanford today laid out the following markers for what he believes would constitute substantive workers' compensation reform.

"When it comes to our workers' compensation system, what we have right now is a system that's too subjective, that hurts our small businesses' ability to compete, and that drives up costs for the average South Carolinian in a way that benefits a select group of people who in many cases happen to be lawyer-legislators," Gov. Sanford said. "What we want is a fair, transparent system that helps the people it's supposed to help. But the fact is the current system is hurting the average South Carolinian when, as one contractor has told me, about 25 percent of the cost of renovating a home goes to pay workers' comp premiums. Also telling is the fact that lawyer-legislators who vote on these reforms, and their partners, have made nearly $8 million since 2004 in workers' comp awards. Clearly, it's a broken system that needs to change.

"In reforming the workers' compensation system, we think several things are key to meaningful reform. One, there needs to be strong objective standards and consistency of awards that help bring an employer's insurance risk more in line with reality. Two, we need to phase out the Second Injury Fund - an outdated system with unpredictable assessments that put an undue burden on many employers. Three, we need to repeal the Tiller decision and other judicial precedents that have driven up liabilities and costs for employers. Finally, we need to reform rules on repetitive trauma and reform the '50 percent back rule.' Meeting these markers would be a very significant step in the right direction, and to that end I'd urge Senators to pass a strong bill -- especially when it comes to objective standards -- so that we can have a meaningful workers' compensation reform bill that protects both our state's workers and our state's businesses."

Last year, South Carolina's workers' comp premiums grew more than 18 percent and our state ranks second in the nation since 2000 in terms of how quickly rates have increased. Meanwhile, reform in other states has produced insurance premium rate reductions for their businesses -- California has seen a cumulative rate reduction of 55 percent since July 2003 while Florida's workers' compensation filings - which impact the cost of premiums - have seen a 13 percent decrease this year alone.