An insurer trade organization said it is joining self-insureds, business groups and municipalities in urging California Gov. Arnold Schwarzenegger to reject a bill that would double workers' compensation benefits to injured workers.

"We will ask the governor to veto it," said Nicole Mahrt, a representative for the American Insurance Association.

However, the head of California's largest private-sector workers' comp carrier said he supports enactment of the measure. Stanley Zax, president and chairman of Zenith National Insurance Company in Woodland Hills, Calif., said he would send a letter to Gov. Schwarzenegger asking him to sign SB 815.

"To my view, this is good legislation," Mr. Zax said of the bill.

The measure--which, if signed, would be phased in over three years and apply to injuries on Jan. 1, 2007 or later--would increase the number of benefit weeks for each level of disability. AIA calls the bill premature and argues it would unwind the workers' comp law reforms of 2004.

A representative for Mr. Schwarzenegger, David Ng, said the Republican governor had not yet taken a position on the measure, but "will veto any bill that rolls back historic workers' compensation reforms that have helped create nearly 600,000 jobs since he became governor."

Asked if Gov. Schwarzenegger considered SB 815 a rollback, Mr. Ng said: "You'll have to wait and see."

Mr. Zax said the bill "is not a change in the reforms. This is an increase in benefits because the impact of reforms won't be known for quite a number of years."

Making changes in benefits, he said, is "not that unusual, and in this case it's appropriate because there is a serious concern whether there were unintended negative [reform] effects on the permanent benefits."

It is appropriate "to make sure legitimately injured workers aren't impacted," according to Mr. Zax. "It is not in anyone's interest for workers to be cheated. That's why I think this [bill] is timely and appropriate."

Asked if he had discussed the matter with other insurers, Mr. Zax said, crisply: "I don't talk to my competitors."

SB 815 is being pushed by State Senate President Don Peralta, D-Oakland, who has reportedly said he will beg the governor to sign the bill.

AIA's Ms. Mahrt said AIA feels that any action to change benefits should await completion of a California Division of Workers' Compensation study of the state's permanent disability rating system, which is underway now. The rating process was changed in 2004 as part of a major revision of the state workers' comp system.

She also said there were objections to the way in which passage of SB 851 was rushed through at the last minute.

The state study underway now would analyze return-to-work rates, "so we will have an accurate and complete understanding of how the reforms have impacted the system," said Steve Suchil, AIA assistant vice president for the Western Region. "It is short-sighted to make changes before that study is complete."

Jason, I'm pretty sure we ran an Arnold pic before, though I can't find it. If not, can we get a free one?

Special Reports /

Insurers Split On Calif. Comp Benefit Bill

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