Calif. Gov. Arnold Schwarzenegger has vetoed a workers’ compensation insurance measure that would have required an employer and insurer to resolve disputes that arise in California to be resolved in the state, and the second
AB 2490 did, however, provide that prior to the inception of the policy, employers and workers’ compensation insurance companies may agree to a choice of law or a choice of forum other than California.
Schwarzenegger said the bill was unnecessary, as “there is no evidence to demonstrate that a problem exists.” Furthermore, the governor said the bill risks reducing the competitive market for workers’ compensation California and leaves open the potential for costly regulatory interpretation that will impact the cost of workers’ compensation insurance.
“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,” Schwarzenegger said. “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.”
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