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10/12 - A Brief Summary of California Workers' Compensation News

Today's post will briefly examine workers' compensation defense news from around the state.

A.B. 2490, the much-discussed workers compensation bill passed by California legislators this past summer, was recently vetoed by Governor Schwarzenegger.

Originally sponsored by Assemblyman Dave Jones (D-Sacramento), A.B. 2490 would have prevented work comp insurance companies from resolving their disputes with California employers in other states with more favorable arbitration provisions (unless both parties agree). In other words, it would have mandated that work comp insurers resolve disputes with California employers in a California venue in accordance with California law.

In addition, A.B. 2490 would have applied only to those employers that utilize California as their principal place of business, and generally affected agreements between work comp insurers and rather complex employers (i.e., those with a business presence in several states.

"The governor had a chance to protect California businesses and provide for these disputes to be resolved in California. Instead, he sided with out-of-state insurers and against California business," said Jones in a statement released to the media.

According to Governor Schwarzenegger's office, A.B. 2490 was unnecessary since there was no evidence to show that a problem even existed. Furthermore, the Governor's office indicated that the legislative proposal would have reduced competition in California's workers' compensation market and greatly increased regulatory costs.

"The high deductible contract negotiations the bill seeks to impact are conducted by sophisticated participants on both sides of the table that are well-versed in all aspects of workers' compensation and other insurance products," said Schwarzenegger in his veto message. "Therefore, I am not convinced the issue addressed by the bill will result in keeping workers' compensation costs down which is the most significant concern to California employers."

Stay tuned for further other developments in the area of workers' compensation defense ...

This post was provided for informational purposes only and is not to be construed as legal advice.

Related Resources:
  
• Schwarzenegger  Vetoes Workers' Compensation Arbitration Restriction (InsuranceNews.net)
• Schwarzenegger Vetoes Workers' Comp Bill (Insurance Journal)

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