Insurance industry groups, while welcoming passage of New York'smassive workers' compensation reform bill, noted today that thelegislation leaves key details still to be decided.

In the measure–which won approval in the legislature on Tuesday,and is expected to be signed next week by Gov. Eliot Spitzer–avariety of issues are to be worked out administratively by thesuperintendent of insurance in consultation with three advisorygroups.

Mike Moran, speaking for the American Insurance Association,noted that among the important areas where regulations are to bedeveloped by the superintendent is a system of objective medicalguidelines for determining disability.

Currently, New York permits lifetime permanent partialdisability payments to injured workers. Mr. Moran said the new lawwould cap payments at 521 weeks in all but the most severecases.

A “safety net” provision, said Mr. Moran, would allow thepayments to continue if a worker is more than 80 percent disabled,and without a very precise set of medical guidelines “you're goingto have an explosion of litigation,” he predicted.

According to the Business Council Of New York State, a keyplayer in negotiations that led to up to the legislation, permanentpartial disability cases had driven the state's comp costs to alevel 80 percent above the national average.

Members of the advisory groups are to include one named by theCouncil, one by the AFL-CIO, one from the Democrat-controlledAssembly, one from the Republican-controlled Senate and twoappointees named by the Democratic governor.

Frank O'Brien, regional vice president for the Property CasualtyInsurers Association of America, said that going forward thedirection the task forces take is “critical” to the ultimatesuccess of the legislation.

“There are a lot of unknowns,” he said, but added that themeasure has the potential to create “a sea change in the workers'comp system.”

The legislation also calls for possible replacement of theCompensation Insurance Rating Board, a nonprofit association ofinsurance carriers, which provides advisory workers' comp rates forthe insurance superintendent.

Under the bill, the superintendent is to report to the governorand the legislature by September as to how the board has performedand whether its work should be performed by some other group oragency.

The current enabling legislation for the board would sunsetFeb.1, 2008. What the superintendent recommends “will be animportant determinant in how rates are made,” noted Mr. Moran.

Monte Almer, the rating board president, angrily rejected theidea that his operation is due for abolition. “It's a report thesuperintendent will be doing. Nothing else,” he said.

Another point in the bill, which is not in dispute, is theelimination of the Second Injury Fund, set up originally to helppay for World War II veteran's job injuries, which Gov. Spitzer'soffice described in a statement as something used by some insurancecarriers as a “costly loophole to avoid paying claims.”

The bill would also increase penalties for workers' comp fraud,and increase minimum and maximum weekly benefits.