The last few years have been rough for SCIF, California's State Compensation Insurance Fund.

A quasi-public entity, SCIF is California's statutory insurer of last resort. Just a few years ago, it's market share had ballooned. Recently that market share has fallen by over half.

Governance problems and operational difficulties plagued SCIF in recent years. As a result, there were legislative oversight efforts, bad press and increased regulatory focus.

In 2007 the CDI reported a long list of concerns about SCIF's operations. At the time, I did a post entitled "Audit Of SCIF Shows Largest Comp Insurer Ran Amok":
http://workerscompzone.com/index.php?en ... 212-010631

Yesterday, the California Department of Insurance released a followup report on SCIF's operations, focusing on 2008.

The report shows progress at SCIF. Of 110 noted problems, 53 are said to have been solved and 40 "partially remediated". 17 areas of concern have not been addressed. You can read the report yourself by clicking here:
http://www.insurance.ca.gov/0250-insure ... Fund08.pdf

Included with the report is a table detailing each concern and the action or inaction on that point.

SCIF does have a new leadership team that will undoubtedly be addressing these other issues.

It's good to see SCIF under the microscope, addressing these issues. A healthy SCIF is important to the California workers' comp marketplace.

But it's clear that other carriers are not subjected to the same scrutiny.

Can you imagine AIG or ACE undergoing this level of scrutiny? Of course not. SCIF's peculiar role and structure put it on the hot seat in a way that other carriers haven't had to face.

The irony of it all is that-in my experience-SCIF has a comparatively stable and well-trained workforce. Compared to the revolving door, adjuster de jour staff of some TPAs and insurers, SCIF's cadre is often stellar.

Stay tuned.

Julius Young
www.boxerlaw.com (you can subscribe to the blog by clicking on the RSS reader on the lower right hand column under "Most Recent Entries")

In recent posts, I've covered some of the moves that gubernatorial candidate Steve Poizner has made in the workers' comp arena.

But what of his nemesis for the GOP nomination, ex-EBay CEO Meg Whitman?

It's early in the campaign, but apparently the buzz among some political types is that Whitman may have a climb to get a grip on the specifics of California's issues. Here's a sample from Calbuzz, a site that tracks California politics:
http://calbuzzer.blogspot.com/2009/05/c ... arkey.html

Here's a question for my readers....who's schooling Whitman on workers' comp issues? Are there players in the comp industry that have lined up with Whitman's brain trust?

Just curious.

Julius Young
www.boxerlaw.com (as always, you can contact me with your feedback
or comments to jyoung@boxerlaw.com)

Radio is dying. So they say. No one advertises on it anymore. And everyone's on their iPod.

But it makes a helluva companion for a comp lawyer making that road trip to one of the Central Valley boards....in my case, today, Stockton. It's where I covered my first WCAB case years ago.

Radio. Where else can you hear Teri Gross interviewing a Montana entymologist on his research on battles between dung beetles. Turns out that in your back yard there's likely a war going on between some male dung beetles trying to get into tunnels dug by the females.Dung beetles the size of pencil erasers, with large horns.

Lots of violence and sex going on right in your back yard. And you thought nature was a placid Buddhist-style paradise. How wrong.

Where else can you hear talk radio speculations about the Taliban rolling on into Islamabad, flipping that weak government and getting a nuclear arsenal? Not so far fetched as you might think:
http://www.nytimes.com/2009/05/04/world ... amp;st=cse

Nothing on the radio about comp, though. It's an under the radar issue.

Of course, Steve Poizner is trying to give the issue exposure.

My trusty e mail box was filled with a Poizner e mail when I returned from Stockton. Here's a link to the Department of Insurance website, which contains links to pdf versions of the brief that Poizner recently filed in the Ogilvie and Almaraz/Guzman decisions:
http://www.insurance.ca.gov/0400-news/0 ... 057-09.cfm

I'll be posting the briefs of other stakeholders when I get my hands on them.

Stay tuned.

Julius Young
www.boxerlaw.com (you can contact me at jyoung@boxerlaw.com)

There's been a growing awareness that employer premium fraud is a major problem for California's workers' comp system.

Last week, out of Orange County, comes a primo example of the problem. Michael Petronella ran several roofing companies that vastly underreported payroll.

We're talking $29 million in actual payroll and $2.9 million in reported payroll, according to the Orange County Register's investigation.

The OC Register piece is worth reading as a textbook example of how some employers are fattening their pockets:
http://www.ocregister.com/articles/insu ... roll-kile#

The result is a system out of whack. System costs are skewed as honest employers subsidize dishonest ones.

Here's a link to a post I did called "It's the Employer Fraud, Stupid!-Part 1":
http://workerscompzone.com/index.php?en ... 501-214812

And a later post, "It's the Employer Fraud, Stupid!-Part 2":
http://workerscompzone.com/index.php?en ... 818-110358

Those posts contain links to the major employer fraud study done for CHSWC by UC Berkeley researchers Frank Neuhauser and Colleen Donovan. Though the studies are about 2 years old now, they are as relevant as the day they were written.

Stay tuned.

Julius Young
www.boxerlaw.com (have a gripe, an idea, a tip, feedback, gossip? you
can e mail me at jyoung@boxerlaw.com)

I've just returned from an event sponsored by the Bay Area's Asian Law Caucus. The event honored Fred Korematsu (who died in 2006) and the legal teams that helped him in the 1940s and 1980s.

Korematsu was a principled man who contested the right of the U.S. Government to send Japanese-Americans to detention camps in California during World War II. He fought his case all the way to the U.S. Supreme Court, losing in 1944.

The court upheld compulsory excusion of Japanese during a time of war.

But in standing up for principle, Korematsu was much revered in Asian-American circles. Tonight, most of the heavy hitting law firms in Northern California had a table there in his honor.

Decades after his Supreme Court loss, a visionary group of lawyers (and a history professor) digging back into the case in the early 1980s, succeeded in overturning the Korematsu conviction (via a writ known as "Coram nobis") in Federal Court in 1983.

It's an inspiring story. The lawyers unearthed evidence of suppressed evidence and governmental manipulation. Judge Marilyn Hall Patel threw out the conviction.

It shows that in law, it's not over til it's over.

But on the workers' comp front, is the "Benson" issue almost over?

The California Supreme Court has denied the petition for hearing in the Benson case. I learned this today in speaking with Ms. Benson's attorney, Tim Timmons of Concord.

The same issues are pending in the California Court of Appeal in Southern California in several cases. But the Supreme Court's action in deciding not to hear Benson does not bode well for the position of the applicant bar in those cases. The result in Benson was the demise of the long held California rule rating many successive injuries as one rather than splitting awards between discrete dates of injury.

The Benson court's interpretation of the 2004 reforms means that some workers will see their indemnity payment awards reduced since the law
will no longer recognize the synergistic effect of successive incidents, even if those incidents involve the same employer and same body part.

That is, unless we see a differing result in the SoCal courts.

Meanwhile, today I joined other stakeholder wonks in Oakland at the CHSWC meeting. I'll be blogging in the coming weeks about several of the topics.

For the moment, I'll offer you a link to a DRAFT REPORT of a study of self-insurance groups that was done by CHSWC staff, including Lachlan Taylor:
http://www.dir.ca.gov/chswc/Reports/200 ... Report.pdf

There has been some concern about the self-insurance groups, and the report makes a number of recommendations. Note that it is a DRAFT REPORT and that the final report could be different.

Stay tuned.

Julius Young
www.boxerlaw.com