Workers’ compensation insurance fraud reporting.

Plain English Breakdown

The bill summary does not specify all conditions under which payroll information can be requested or provided, leaving some uncertainty in these areas.

Reporting Fraud in Workers' Compensation Insurance

The bill requires insurance companies and rating organizations to report suspected premium fraud involving workers' compensation to the Employment Development Department, along with other agencies, and allows these entities to request detailed payroll information for investigation purposes.

What This Bill Does

• Requires insurers and licensed rating organizations to notify the Employment Development Department about suspected premium fraud in addition to notifying local district attorneys and the Fraud Division of the Department of Insurance.
• Allows insurers, agents, or rating organizations to ask the Employment Development Department for detailed payroll information if they suspect premium fraud.
• Specifies that the Employment Development Department can only provide requested payroll details if certain conditions are met and the requester agrees to pay for the costs involved.
• Prohibits the use of provided documents for purposes other than investigating, prosecuting, or preventing insurance or workers' compensation fraud.

Who It Names or Affects

• Insurance companies
• Rating organizations
• Employment Development Department
• Local district attorneys and Fraud Division of the Department of Insurance

Terms To Know

Workers’ Compensation Insurance Fraud Reporting Act (the act)

A law that sets rules for reporting suspected fraud in workers' compensation insurance.

Authorized governmental agency

An official government body allowed to receive and use information about suspected fraud.

Limits and Unknowns

• The bill does not specify the exact conditions under which payroll information can be requested or provided.
• It is unclear how this legislation will affect ongoing investigations or existing laws regarding access to public records.

Official Summary Text

SB 536, as amended, Archuleta.
Workers’ compensation insurance fraud reporting.
Existing law makes it a misdemeanor or a felony to engage in specified acts of fraud or material misrepresentation for the purpose of obtaining or denying workers’ compensation, as specified. Existing law, the Workers’ Compensation Insurance Fraud Reporting Act (the act), requires insurers and licensed rating organizations to release upon request to an authorized governmental agency, as defined, relevant information deemed important to the authorized governmental agency that the insurer or licensed rating organization may possess relating to any specific workers’ compensation insurance fraud investigation. The act requires, under specified circumstances, an insurer or licensed rating organization to notify the local district attorney’s office and the Fraud Division of the Department of Insurance, and requires that entity, unless specified circumstances exist, to notify any other
authorized governmental agency of suspected fraud, as specified. The act also requires the Employment Development Department to release, upon written request, to an authorized governmental agency relevant information that the Employment Development Department may possess relating to any specific workers’ compensation insurance fraud investigation. The act requires, unless specified circumstances exist, an authorized governmental agency that is provided with information pursuant to those provisions to release or provide that information in a confidential manner to any other authorized governmental agency for purposes of investigation, prosecution, or prevention of insurance fraud or workers’ compensation fraud.
This bill would require an insurer or licensed rating organization to notify the Employment Development Department, in addition to the local district attorney’s office and Fraud Division on the Department of Insurance, of suspected fraud when the fraudulent
act relates to premium fraud. The bill would also require, upon written request by an
insurer or specified others,
insurer, agent, or licensed rating organization,
the Employment Development Department to release or provide detailed payroll information, including payroll summary totals, allowing the requester to compare the records with the information they are otherwise entitled to receive from employers in workers’ compensation claims or pursuant to workers’ compensation policies, unless doing so would violate existing law or compromise an ongoing investigation. The bill would require the Employment Development Department to only provide the information if specified requirements are
met.
met, and the requesting insurer, agent, or licensed rating organization to reimburse the department’s actual, direct costs of releasing or providing this information.
The bill would prohibit the provided documents from being used for specified purposes.
Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.

Current Bill Text

Download Bill PDF