Louisiana: Governor vetoes bill aimed at extending filing time for comp claim
The legislation, H.B. 658, would have changed the "prescriptive period," or time limits for filing a comp claim in the state. The bill, sponsored by Rep. Christopher J. Roy Jr., D- Alexandria, would have extended the prescriptive period for claims from two to three years.
According to Roy, the aim of the legislation was to protect injured employees who develop conditions that aren't diagnosed before the two-year period expires. However, Jindal and other critics of the bill argued that the measure would have increased the likelihood of fraudulent claims, insurers' exposure to lawsuits, and the need for insurers to maintain higher reserves -- all of which could have led to higher comp rates for businesses.
Louisiana's Office of Risk Management projected the legislation's fiscal impact on the state workers' comp system at approximately $200,000 -- approximately 1 percent of the total claim costs. Jindal said that applying that same percentage to the private system, which paid total benefits of $790 million in 2008, the industrywide impact of the bill could have been in the range of $7.9 million annually.
"I understand that the Workers' Compensation Claims counsel worked with the author of the bill to address hardship caused to a small class of developmental disability claims involving workers who return to work after an accident and continue to receive care but do not require surgery until more than two years later," Jindal wrote in his veto message. "The final version of the bill, however, is not narrowly tailored to achieve this specific objective. By applying to all delayed-injury claims, this provision would have an unacceptable impact on the setting of reserves and the costs of premiums and litigation for employers and insurers."
A number of organizations, including the Louisiana Workers' Compensation Corp., the Louisiana Association of Self-Insured Employers, the Property Casualty Insurers Association of America, and the Louisiana Restaurant Association Self Insurer's Fund, petitioned the governor to veto the bill. Greg LaCost, assistant vice president and regional manager for PCIAA, said the opportunity for fraud would have exponentially increased under the legislation, which would have forced insurance companies to set aside additional reserves and could have lead to a diminished ability to write policies in the state.
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July 27, 2009
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