However, there will still be Hawaii businesses that face high premiums because they can't get conventional insurance and Cayetano yesterday appointed a panel to help them.

A state investigation shows that insurance company profits are such that workers compensation rates could come down 27.8 percent for companies in the high-risk pool and 27.3 percent for others, Cayetano said yesterday.

Those are bigger reductions than the high-risk 21.7 percent cut and the 23.4 percent cut for non-high-risk businesses proposed recently by the National Council on Compensation Insurance.

The governor said that a study by Wayne Metcalf, state insurance commissioner, showed that the cuts could be higher. The NCCI, in its study of Hawaii insurance, did not take into account investment income on funds held by the insurance companies, he said.

Metcalf has yet to approve new rates to go into effect Nov. 1.

Meanwhile, Cayetano named the board of the new Hawaii Employers' Mutual Insurance Co., created by the Legislature this year to help businesses that have been placed in the workers compensation assigned risk pool.

Such businesses, which cannot get ordinary insurance for a variety of reasons such as hazardous working conditions, pay much higher rates than companies that are not considered high-risk.

Cayetano said he knows of a business that has 19 employees and a good record but has to pay $90,000 a year in workers compensation premiums because it is in the assigned risk pool.

The Hawaii Employers' Mutual Insurance is controlled by the companies it insures. They are expected to elect a new board to replace the interim one named by Cayetano.

Initial members of the board are: Janet Y. Buen of Maui Electric Co.; Donna B. Goth of the Campbell Estate; Roland Higashi, a Big Island businessman; Kathryn K. Inkinen, president of a consulting firm; Kauai motorcycle dealer Ann Leighton; Clyde Mark, of Outrigger Hotels; Charles S. Ota, owner of several small businesses; and Barbara S. Tomber, of First Hawaiian Bank.