Fraud Commission Ups Employer Assessments
Article written and released by Workers' Comp Executive

SACRAMENTO -- California employers will be paying $48.1 million in assessments to the Fraud Assessment Commission next year, the commission determined yesterday.

That's a 14 percent increase over the $42.3 million in assessments California employers will pay in the 2007-2008 fiscal year, according to the commission.

The assessments, which are split between California's district attorneys and the Department of Insurance, primarily cover cost of living increases and more enforcement at the local level.

Cumulatively, California's counties asked the commission for $30.2 million in funding for district attorneys for the 2008-2009 fiscal year -- $5 million more than the commission funded last year.

Just more than $29 million will be budgeted, but will be dependant upon carry-over, which will then be subtracted form the total. Carry-over is estimated at $1.5 million.

The Department of Insurance asked for $20.2 million in funding, up $2 million - just more than 1 percent - from the 2006-2007 fiscal year and will be fully funded.

The final assessment number was derived by combining the approved budget allotments for both the DAs and the CDI, plus $75,000 to cover the notification per AB 749 and $200,000 for incidentals, minus the commission's current $1.4 million balance.

"When we are engaged in major litigation, costs increase rapidly, and we are a fabulous bargain," Gary Fagan told the commission. We're going to trial against lawyers that cost $1,000 an hour...who spend a tremendous amount of money in litigation, and we have to be able to match that."

Fagan, who co-chairs the California District Attorney Association, warned the commission that if it wants to actually increase the program needs to increase the assessments.

"In our county, and probably state-wide, it is my expectation that we are going to continue to see an increase in insurance fraud crimes, and we frankly could use all the money we can get," Blair Thomas, Alameda County Supervising DA told the commission. "Though we do operate close to the bone, I think you are getting the best you can get for your money."

Dale Banda, deputy commissioner of the Department of Insurance's enforcement branch, noted that the fulfillment of the department's budget request is necessary to meet Commissioner Poizner's objectives for fighting fraud, which include the filling of approximately 40 peace officer vacancies within the CDI.

"The complexity of these cases has significantly increased," said Commission Chair Bill Zachry. "We have asked the CDI to assign investigators to each of the DAs because we thought that [the building] of relationships would better both parties."

If you have any questions or need more information, please contact:

Jim Corbett
Account Executive, Sales
jimcorbett@barneyandbarney.com
(949) 544-8462

Return to table of contents