California never allowed slaves, but it may become the first state in the nation to make slave reparations a reality.

The possibility has supporters and opponents arguing over whether the time for reparations has come.

"It's a demand, I think, whose time has come. It's a demand that's a just demand," said Earl Hutchinson, an author and political commentator.

"To bring it up now, 150 years later almost, it makes no sense. But it reinforces the point that for some the issue of race will never go away," said Ward Connerly, chairman of the American Civil Rights Institute.

Two years ago, Democratic Gov. Gray Davis signed a law forcing insurance companies to disclose policies they wrote for slave owners more than a century ago. This week, the state's Department of Insurance released that information. None of the half dozen insurance companies are based in California, but they all did business in the state.

"It's smoking gun proof that a lot of insurance companies, insurance companies in this case, made money off slavery. They wrote the policies, and especially, they cashed in on those policies," Hutchinson said.

In an event last week, Davis said he would be interested in making amends if insurance companies did profit from slavery.

"Clearly, we want to right any wrongs and do justice to people who were taken advantage of," he told an audience at the Digital Connections Conference, a small business gathering sponsored by civil rights activist Jesse Jackson's Rainbow/PUSH Coalition.

The issue is extremely divisive, in large part because Davis appears to have endorsed the controversial plan being pushed by Jackson to give payments not to slave descendants, but to non-profit groups like Jackson's that serve the black community.

Connerly, who is in the midst of a fight to remove racial data from government records, is wary of Jackson's motive.

"I think it's not only convenient, it's probably orchestrated that way so the organizations that Mr. Jackson represents and others that represent, allegedly represent, the victims of slavery would be unduly enriched by this," he said.

The suggestion that companies may be forced to pay has political analysts wondering what is behind Davis' comment. He is running comfortably ahead in statewide election polls, leading one analyst to suggest that for Davis, it is a matter of principle, not politics.

"If Gray Davis needed the African-American vote in this state, then supporting reparations might help him, but the truth of the matter is that there is no constituency more loyal to Democrats than African-Americans," political analyst Susan Estrich said.

Since Gov. Davis and Rev. Jackson stood together in support of the idea last week, they have been less willing to talk about reparations. Soon after Fox News called about the issue, Davis and Jackson cancelled a scheduled joint press conference.

Others are talking, however, especially minority rights activists who expect a flurry of lawsuits, and Republicans who say they may have just written their first ad for the fall gubernatorial campaign.

Claudia Cowan currently serves as Fox News Channel's (FNC) San Francisco-based correspondent. She joined the network in 1998.