Title: President, Association of California Insurance Companies
Resume: Prior to taking his present position, he was regional vice president with the National Association of Independent Insurers. Before beginning work as an advocate for insurers in California, Sorich was assistant attorney general in the Illinois Attorney General's office.
Schools: Loyola University in Chicago, University of Illinois College of Law
Boards & Commissions: Member of Illinois and Hawaii bar
Inspiration: Howard Bunn, Jr.; Alan Tebb; Mark Webb
Favorite quote: “Our lives begin to end the day we become silent about things that matter." (Martin Luther King, Jr.)

Sorich leads one of the most respected insurance associations in the state, with a very large focus on workers’ comp issues. He is a frequent presence at the Capitol and has been an advocate of making self-insured groups more financially transparent, and on his watch introduced a bill that would have accomplished that goal. ACIC also sponsored a bill signed into law that resulted in a comprehensive study of the reasons why so many carriers defaulted in the late 90s.

What are the top three issues in California workers’ comp today?  
Pricing difficulty, that’s attributable to the difficulty in predicting what future costs may be. Second, rising medical costs. Three, political uncertainty surrounding workers’ comp. Changes in politics and how political changes may affect future developments.

It looks like the State Fund sale isn’t going to happen, but it looks like we may be heading for a hard market. What does that mean for State Fund? Will its market share increase to the same levels as it did previously? Is State Fund in need of any additional reforms in governance that may make a difference in how it handles its business? For instance, a proposal this year—it looks like the bill is dead for this year—would require that board members be confirmed by the Senate. Is that a good idea?  
I think that SCIF will always play an important role in workers’ comp system here. Beyond that, but it’s difficult to imagine SCIF achieving the market share they had several years ago.

Are medical provider networks a help or a hindrance? How should they be improved?  
We see them as a help; we believe they’re having a positive influence on containing costs. We continue to be concerned about the decision in the Palm medical case, which creates uncertainty regarding an insurance company’s ability to exclude medical providers from a network.

How should utilization review be improved?  
We think that administrative law judges should be more restrained in overturning utilization review decisions. If a utilization review decision is based on national treatment guidelines, judges should give stronger deference to those decisions.

What needs to be done to improve return-to-work?  
The supplemental job displacement benefit needs to be reformed or repealed and secondly, return-to-work will probably still be a challenge until there is a greater economic recovery.

What do you see, other than medical, as the next big cost driver?  
We see litigation. Litigation is spurred by the two court cases: Almaraz/Guzman and Ogilvie.

Is it realistic to deal for more cost-cutting reforms in exchange for increasing PD benefits?  
We’ll defer that to employers to make that decision.

Where do you see applicant attorneys focusing litigation in the future?  
Almaraz/Guzman and Ogilvie cases. They provide a roadmap for future litigation.

Now that Obama’s health care bill is law, is there any correlation with workers’ comp? The language changed a bit. Is there a greater connection? Is there anything that has emerged in the law that would change their answer from last time?  
I do see potential impact, but it figures to be a mixed bag. On one hand, there’s a good possibility that there will be less cost shifting. By that I mean that under today’s situation it is sometimes alleged that people who do not have health insurance will look to workers’ comp for medical treatment for conditions because they want coverage for those conditions. There is some cost shifting today and that may lessen because more of the population will have health insurance. I think a somewhat positive impact is that if people do in fact have health insurance, and people have access to better care, we could be dealing with a healthier workforce. A healthier workforce should result in fewer injuries on the job. People will be healthier when they go to work will have fewer injuries once they get there. On the other hand, the increased demands on our medical care system that are probably likely going to result from more people having access to the system could put some strain on accessibility of care for workers’ comp claimants. That’s a possibility, and second, there are elements in the federal law that will lower the reimbursements that medical providers are able to obtain under the medical insurance program. There’s a potential that that could result in cost shifting to workers’ comp. Medical care providers who feel incompletely compensated could look to recoup some of those costs by shifting those costs to workers’ comp where there is not the kind of cost containment leverage that there is under health care. There is a provision in the federal law that relates to an excise tax on the sale of medical devices. Those increased costs will eventually be picked up by the workers’ comp system. All these thoughts are speculative, but all merit some watching [in the future].

What is the effect of more than $1 billion in payroll being absorbed by the self-insured groups?  
We see public policy issues being presented here because of the uncertainty regarding the oversight of group self-insurers’ financial operations; more business going to self-insured groups raises the question about how these groups are being regulated.

Is medical severity going to continue to climb or is it just a blip?  
This is an observation that there is an apparent medical inflation and the demographic elements that indicate that medical severity could increase, specifically the aging workforce and pervasiveness of obesity in our society. These spur the cost of medical treatments.

Are there any changes to claims frequency?  
We don’t have specific data, but there does seem to be a national trend of a decrease in claims frequency.