AIA Backs Schwarzenegger on Veto of WC Bills

Gov. Arnold Schwarzenegger made the right decision when he used his veto pen to stop legislation that would have interfered with California’s stabilized workers’ compensation system, according to the American Insurance Association.

“The historic reforms have saved employers 62 percent in lower workers’ compensation costs since 2004,” said Steve Suchil, AIA assistant vice president, state affairs. “While providing for stability and predictability in the provision of benefits to injured workers, these savings have translated into more jobs, business expansion and investment in new equipment. These investments by California’s businesses have been good news for employees and customers. As California copes with troubled economic times, it would be a mistake to poke holes in our state’s workers’ compensation reforms and return uncertainty, litigation and higher costs to the system.”

“Governor Schwarzenegger was correct to point out in his veto message of SB 1717 (Perata) that this bill would have added a $1 billion benefit increase at the same time the Workers’ Compensation Insurance Rating Bureau is recommending a 16 percent increase in the pure premium rate because of climbing medical costs,” said Suchil. “Now is the time for caution.”

Gov. Schwarzenegger vetoed:

SB 1115 (Migden) Permanent Disability Apportionment – Discrimination: For apportionment for permanent disability benefits, would prohibit discrimination on the basis of race, religious creed, color, or status in other protected classes. Current law prohibits improper discrimination and the bill would inject uncertainty into the apportionment process.

Veto Message - SB 1115

SB 1717 (Perata) Permanent Disability Benefits: Would substantially increase permanent disability indemnity benefits paid to injured workers by increasing the number weeks that such benefits are paid.

Veto Message - SB 1717

AB 2969 (Lieber) Utilization Review Physicians: Would forbid use of workers' compensation utilization review physicians not licensed in California.

Veto Message - AB 2969

AIA opposed and sought vetoes of these three measures.