Investment of reserve funds is one way insurance companies make money. To some, the cash flow from premiums, even vastly reduced ones, is more important than immediate profits. In what is supposed to be a no-fault system, he says, the injured employee should be the focus of attention. Workers' compensation is, after all, different from most insurance. It was created to protect the employee.
Most employers recognize that the workers' compensation laws are socially beneficial.
That's part of good management and having a well-run company, one that not only looks at the bottom line but also looks to take care of the employees. One company with that type of safety program is Kent Seatech, the nation's largest supplier of hybrid striped bass for restaurants and upscale markets, with administrative offices in Sorrento Valley and a fish farm in Mecca, just north of the Salton Sea. Jim Schmidt, Seatech's vice president for finance and controller, says the company's workers' comp program identifies potential problems, streamlines paperwork and holds a monthly safety meeting that improves employee morale. But Seatech also enjoyed the results of the 1993 reforms in the form of huge drops in workers' compensation premiums. Of course, adjustments came shortly thereafter.