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November 1, 2001

California rejects workers' comp benefit increase for third straight year

For the third consecutive year, California Governor Gray Davis this month vetoed a bill that would have increased workers' compensation benefits.

The bill (SB 71) failed to include cost-saving systemic reforms and wouldhave put $4.7 billion in new costs on a system already struggling with skyrocking costs, a spokesman for the American Insurance Association (AIA) said.

"Governor Davis pledged his support for a bill that balanced benefit increases with systemic reforms in his veto message [last year]," Mark Webb, vice president of AIA, said "Unfortunately, the trial lawayers who sponsored SB 71 are more concerned about making money from the system instead of reforming it."

"California's workers' compensation system will continue to face serious problems unless policites are enacted to control rising medical costs and creating objectivity in the disability rating process," Webb added.