The workers compensation system is plagued by inadequate rates and an expanding range of benefits, a panel of insurance industry leaders said Wednesday.

At the annual meeting of the National Council on Compensation Insurance, a New York-based rate-making and advisory organization, panel participants discussed the problems facing workers compensation insurers.We're getting too many people in the workers compensation system, said Robin Obetz, chairman of the U.S. Chamber of Commerce workers compensation committee.

Mr. Obetz said courts and legislators are expanding the benefits that must be paid for by workers compensation insurers.

The workers compensation system is becoming a system to pay for disability, unemployment and retirement compensation, he said.

People are getting benefits they don't deserve, Mr. Obetz said. And we're paying for other disabilities, adding that the system also is having to pay for occupational and stress-related illnesses.

But the state legislatures that set workers compensation rates have not increased the prices insurers can charge to pay for increased benefits.

It's not the same system as 75 years ago, Mr. Obetz said. The costs and pricing are different.

John E. Washburn, Illinois insurance director, said expansion of workers compensation benefits is a natural evolution that can't be stopped.

Some people want to take workers compensation back to losing your hand in a machine, said Mr. Washburn, who also is president of the National Association of Insurance Commissioners, a Kansas City, Mo.-based association of insurance regulators.

He added that expansion of benefits has become public policy, supported by legislators, courts and the public. It's been a public policy choice, he said.

Mr. Washburn said politicians have a natural desire to enhance benefits for their constituents.

Sen. Donald Halperin, D-N.Y., said most of the contact lawmakers have with the workers compensation system is from constituents who are unhappy with their benefits or need help securing benefits.

The issue should not be trying to cut benefits, he said. It's not realistic, said Sen. Halperin, who also is president of the National Conference of Insurance Legislators, a Brookfield, Wis.-based association.

He added that if people are injured at work they do not have the same ability to be compensated as they would if they sued a driver who caused an auto accident.

Peter Lardner, chairman, president and chief executive at Bituminous Insurance Cos., said lawsuits are the problem for workers compensation insurers.

Too many lawyers are involved in something that's supposed to be without fault, Mr. Lardner said. The point of the system is the injured worker. We've lost sight of that.

Mr. Lardner said the problem is not the few people who get benefits but don't deserve them. Excessive litigation and high medical-care costs hurt the system the most, he said.

The worst is that the cost is too high and the price is too low, Mr. Larder said.

Thomas Chittenden, senior vice president and general counsel at New York- based Citicorp Insurance Group Inc., said the tort system not the best mechanism for resolving workers compensation cases. He said the tort system causes delays in getting benefits to injured workers.

Mr. Obetz said, The courts have misunderstood what it (workers compensation) was to be for. It was supposed to be for work-related disabilities.