Mr. Spitzer said he has begun discussions with legislators and representatives with business and labor to find solutions that will lower premiums and increase benefits. He said a solution must also be found for workers to get "the medical treatment they want and need so they can get back to work."

Kristina Baldwin, regional manager and counsel for the Property Casualty Insurers Association of America in Albany, said: "We are pleased with what the governor had to say. He recognized that New York's system is broken and needs to be reformed. It's a message we have tried to get across for a number of years."

"We are encouraged by Gov. Spitzer's remarks," said Ellen Melchionni, vice president of the New York Insurance Association in Albany. "On workers' compensation, we are looking forward to changes in the system."

What shape those reforms will take is difficult to say at the moment, Ms. Baldwin pointed out, because no actual proposals have been put on the table.

Both suggested that whatever reforms take place will probably happen during the initial meeting of the legislature, the first 100 days.

The last set of reforms in the 1990s, Ms. Baldwin noted, under the administration of Republican Gov. George Pataki, took place during the early part of his term.

Among some of the things that need to be addressed to improve the program is a duration cap on permanent partial disability (a permanent injury that does not prevent an individual from working), said Ms. Baldwin.

Other inequities in the system that need to be addressed include a system that has some insurers collecting more premium than others, and elimination of Labor Law 240, or the strict liability law covering scaffolding accidents, said Ms. Melchionni.

Ms. Melchionni said the will to reform would depend on the dynamics between Mr. Spitzer and the legislature, and from the tone of the reception he received during his address; she said she was hopeful something could be accomplished.

If he is unable to get bills passed to fix workers' comp and other initiatives to improve the state, she warned, it would ultimately doom any chance for Mr. Spitzer to move up the political ladder.

"He clearly has aspirations for higher office," she said.