4, Issue 7
Victories for Truth, Justice, and Lower Insurance Premiums
Drink and Be Merry
inclined to commit insurance fraud can be
skilled and persuasive actors. Many take
great care to stay in character as their
claim proceeds. But there is something about
the holidays that distracts even the most
dedicated of conmen and con-women. Maybe
it is something in the eggnog. Perhaps the
spirit of the season just overcomes the
caution that dominates a fraudster’s life
in other months.
a DMA Investigator, Los Angeles
case came to us from defense counsel and
had a high exposure (close to $400,000).
Our subject was supposedly completely
disabled in her right hand. Our first
attempt at surveillance, in the fall of
the year, found her playing her part,
using her left hand. But the file had
enough red flags that we scheduled additional
surveillance in December.
picked her up on the way to the mall.
Maybe it was the sale at the Gap that
caused the forgetfulness. At once we had
her on film using her right hand to carry
her purse, open the doors at the mall
and, after having successfully made several
purchases, holding and dialing a cell
was a great start, but we needed more
to eliminate the “one of my good days”
attack on hard film evidence.
days later we picked her up late in the
day and followed her to a restaurant.
We filmed her use of her right hand opening
and closing a car door, opening the door
to the restaurant. As I got set to wait
for her to come out, I noticed that this
restaurant had seating near an expanse
of large windows providing a lovely view
for those outside as darkness fell and
the lighting inside came up. I thought
it would be too much to ask for that she
should choose a window seat, but I had
to check it out. Sure enough, there she
was with her companion in full view and
amazingly enough there was a parking space
across the street. 59 minutes later I
had the entire meal on film, all of it
eaten right-handed (including some fancy
twirling of the pasta onto her fork and
some vigorous cutting of some unknown
is a wish common to the holidays that
one and all get what they deserve. This
applies not only to iPhones, designer
bags and video games for the good boys
and girls. It also applies to those with
$400,000 bogus claims - potentially ill-gotten
gains that will drive our premiums and
blood pressure higher if paid. When such
a claimant has to settle for less than
5% of demand, hardly enough after attorney
fees to cover the credit card bills run
up while starring in our surveillance
videos, holiday justice has been served.
The lump of coal in her stocking is beyond
our powers, but we are contemplating asking
permission to send a copy of our video
to Santa so that the case might be wrapped
up in full.
Bureau Recommends 5.2 Percent Hike At Rate
The Workers' Compensation Insurance Rating
Bureau of California yesterday made its
case to the Department of Insurance for
a 5.2 percent pure premium rate increase.
The Bureau's revised filing is one percentage
point more than its original submission
in September, an increase necessitated by
Governor Schwarzenegger's endorsement of
AB 338. If Insurance Commission Steve Poizner
approves the filing for advisory rates on
Jan. 1, 2008, it'll be the first increase
since July 2003 and perhaps a portent of
things to come. Poizner was unable to attend
the rate hearing due to the Insurance Department's
in working with policyholders and insurers
dealing with the raging Southern California
fires. That left Chris Citko, CDI senior
staff counsel, running the meeting.
Bureau's original filing proposed a 4.2
percent increase contingent upon the governor
not signing AB 338. The new law, which affects
workers injured on or after Jan. 1, 2008,
increases the window during which injured
workers may use their temporary disability
benefits from two years from the date of
the first benefit payment to five years
from date of injury. Schwarzenegger signed
the bill into law earlier this month. According
to Dave Bellusci, chief actuary for the
Bureau, this change will eliminate about
one third of the TD savings realized from
the signing of AB 338, the greatest factor
in the Bureau's proposed increase was the
affects of loss adjustment expenses – that
is the costs associated with adjusting claims.
Loss adjustment expenses have not decreased
commensurate with the decline in losses
from accident years 2003 through 2006. This
factor accounts for 3.5 percentage points
of the proposed increase. As for reasons
that the LAE are not declining, Bellusci
points to new medical utilization review
procedures, legal challenges to regulations
and legislation, and challenges to the Permanent
Disability Rating Schedule that are likely
increasing the cost of administering claims.
the extent that there will be reduced litigation,
we haven't seen it yet. Maybe when the smoke
clears from the reforms, we'll see a decline
in loss adjustment expenses," Bellusci
said at yesterday's hearing.
also informed the Department that the data
submitted by AIG and Virginia Surety Insurance
Company are included in the rate filing.
AIG and Virginia Surety's data were excluded
from the July rate filing because of data
inaccuracies and anomalies respectively,
but they have since remedied the deficiencies.
However, the data of Arch Insurance Company
were excluded because of data anomalies.
Arch has less than one percent of the market
share in California.
year's rate is now in the hands of Poizner,
who must either accept the filing or reject
and order a different rate change in either
direction. Insurers, however, are not required
to use the pure premium rate and may price
policies as they see fit.
Worker's Comp Executive
Copyright © 2007 Providence Publications,
LLC - All Rights Reserved.
State Fund Holds Line On 2008 Rates
Walter Olson, overlawyered.com
State Compensation Insurance Fund has announced
the filing of its Jan. 1, 2008, rating plan,
making no change in the average collectible
rate level. SCIF held the line on rates
despite the Workers' Compensation Insurance
Rating Bureau's filed recommendation for
a 5.2 percent average rate increase effective
State Fund's rating plan adopted the Workers
Compensation Insurance Bureau's recommended
changes in individual class loss costs.
Individual employers will therefore see
differences in their pricing due to changes
in their classification loss costs, experience
modifications, and other changes in rating
plan features. Overall, however State Fund's
average collectible rate level will be unchanged.
Small employers (premiums between $1,000
and $59,999) with superior safety records
will continue to receive a 10 percent workplace
safety credit. "Small businesses are
crucial to the California economy. State
Fund is pleased to be able to reward these
employers for maintaining safe workplaces,"
said State Fund President Janet Frank.
"Employers are enjoying the benefit
of a healthy, competitive workers' compensation
market that is directly attributable to
passage of the Governor's reform legislation
in 2004, SB 899, and earlier 2003 reform
legislation, AB 227 and SB 228," she
continued. "State Fund's rate filing
reflects our role as a carrier of choice
for many employers, as well as the safety
net for any employer needing workers' compensation
insurance in California."
State Fund's rate level remains 55 percent
below pre-reform 2003 rate levels. The new
rates will apply to new and renewal workers'
compensation policies with an effective
date on or after Jan. 1, 2008.
For more information, visit www.scif.com.
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