California Legislature Takes Action on Workers’ Comp, Punitive Damages

The Legislature ended its 2005-2006 session last week, passing bills affecting workers’ compensation, State Compensation Insurance Fund and punitive damages, among other issues. The governor has until midnight Sept. 30 to act on the bills approved in the waning days of the session. He can either veto or sign them into law. If he fails to act by the deadline, they become law without his signature.

Following is a recap of the legislative action, compiled by the Association of California Insurance Companies.

Bills Passed and Sent to Governor
AB 1302 (J. Horton) State Agency Regulations. AB 1302 would extend to all state agencies the requirement currently applicable to the Department of Insurance that interested parties be advised at least five working days prior to submission of an emergency regulation to the Office of Administrative Law. Approved and sent to the governor by the Assembly. ACIC supports the bill.

AB 1368 (Karnette) Workers Compensation. AB 1368 would exclude public safety personnel from apportionment determinations. Approved and sent to the governor by the Assembly. ACIC opposes the bill.

AB 2125 (Vargas) Insurance. AB 2125 would clarify the insurance commissioner’s regulatory authority over the State Compensation Insurance Fund. Among other things, the bill also would revise property insurance cancellation requirements. Approved and sent to the governor by the Assembly. ACIC supports the bill.

AB 2287 (Chu) Workers Compensation: Acupuncture. AB 2287 would authorize special workers compensation treatment guidelines for acupuncture. Approved and sent to the governor by the Assembly. ACIC opposes the bill.

AB 2831 (Ridley-Thomas) Insurance, Income, and Corporation Tax Credits: CDFI. AB 2831 would extend the sunset date for certain tax credits on qualified investments made by insurers to community development financial institutions from Jan. 1, 2007, to Jan. 1, 2017. Approved and sent to the governor by the Assembly. ACIC supports the bill.

AB 2942 (Koretz) Workers Compensation: Inpatient Burn. AB 2942 would establish statutory reimbursement rates for certain inpatient burn Diagnostic Related Groups. Approved and sent to the governor by the Assembly. ACIC opposes the bill.

SB 815 (Perata) Workers Compensation. SB 815 would increase permanent partial disability benefits for workers compensation claimants. Approved and sent to the governor by the Senate. ACIC opposes the bill.

SB 832 (Perata) Punitive Damages. SB 832 would mandate that 75 percent of punitive damage awards be directed to the State of California. ACIC opposes the bill.

SB 1489 (Ducheny) Attorney’s Fees: Attorney General. SB 1489 would force companies that are sued by the attorney general to pay all investigation and prosecution costs whenever the attorney general “prevails.” Approved and sent to the governor by the Senate. ACIC opposes the bill.

SB 1542 (Migden) Motor Vehicles: Key Information Access. SB 1542 would require an auto manufacturer to provide a system that gives the registered vehicle owner information necessary to reproduce the vehicle’s key to allow the owner to enter, start and operate the vehicle. Approved and sent to the governor by the Senate. ACIC supports the bill.

Bills that Failed Passage
AB 1612 (Pavley) Workers Compensation: Network. AB 1612 would have required a contracting agent to remove a medical care provider from a medical provider network at the provider’s request.
The bill failed passage due to lack of a vote. ACIC opposed the bill.

AB 3026 (Lieber) Workers Compensation: Medical Service Visits. AB 3026 related to medical treatment guidelines for peace officers. The bill failed passage due to lack of a vote. ACIC opposed the bill.

Bill Signed into Law by the Governor during the Past Week
AB 2815 (Bogh) Service Contracts: Definitions. AB 2815 authorizes the insurance commissioner to approve vehicle service contracts when the company issuing the contract maintains a ratio of direct written premiums to surplus of not more than 3 to 1. ACIC supports the bill. Effective date: Jan. 1, 2007

Source: ACIC