WESTERN NEWS ZONE......

State Compensation Insurance Fund announced that it will extend credit to policyholders who have suffered a financial loss or business disruption caused by several wildfires that are ravaging parts of Northern and Southern California. State Fund has more than 100,000 policyholders in the areas.

The fires are spread from as far north as Siskiyou County to Riverside County in Southern California.

By Tuesday, there were seven major fires across the state. The devastation was more severe in the Station Fire which so far has destroyed 18 residences and consumed 121,762 acres in Los Angeles County. Another fire which ravaged 63 homes and businesses near Auburn, was 80 percent contained by Tuesday afternoon.

During a press conference on Tuesday at a command center in Southern California, Gov. Arnold Schwarzenegger declared a state of emergency in San Bernardino County in the wake of two major fires that have led to the evacuation of Oak Glen as well as hundreds of other evacuations in nearby Yucaipa.

State Fund will work with policyholders in the devastated areas who are unable to report payroll figures or submit payments as a result of the emergency.

State Fund has set up dedicated customer service lines to provide assistance to Southern California policyholders whose operations were impacted. Policyholders are encouraged to contact State Fund's Customer Service Center at (800) 388-0902 to make arrangements for September 2009 payroll reports and payments. This program will be offered to employers through a series of newspaper announcements and mailings to all State Fund policyholders in the affected area.

California Duo Charged in $18M State Fund Scam

California Insurance Commissioner Steve Poizner announced that two Southern California men have been charged with conspiring to defraud the State Compensation Insurance Fund (State Fund) of more than $18 million.

David Zahler, 52, of Huntington Beach, and David Tai, 66, of Hacienda Heights, surrendered to police on Nov. 26, following a two and a half year CDI investigation.

Zahler and Tai allegedly conspired to defraud the State Fund of over $18 million in insurance premiums they owed for the worker's compensation policy issued to Staffing Services Inc., a temporary employment company with thousands of employees.

It is alleged that the men purposely misrepresented the types of employees for which they obtained workers' comp coverage, in order to pay $18 million less in premium payments. Zahler was the CEO and Tai the chief financial officer for Staffing Services. Staffing Services headquarters is located in the City of Bellflower.

CDI launched an investigation into Staffing Services after State Fund notified the California Department of Insurance of this suspected fraud. The investigation revealed that Zahler and Tai were allegedly providing false information to the State Compensation Insurance Fund to fraudulently obtain workers' comp insurance coverage for $18 million less than should have been due for their insurance coverage.

Zahler and Tai each face up to 20 years in prison and up to $40 million in fines if they are convicted of these crimes.

State Fund Extends Credit For Its Calif. Fire Victims

California's State Compensation Insurance Fund announced it will extend credit to policyholders who have suffered financial loss or business disruption caused by the fires in Montecito, Orange County and Sylmar.

To date, more than 900 residences and structures have been lost due to the flames and more than 35,000 acres burned and an untold number of businesses have suffered damages.

"With the fires being concentrated in densely populated areas, we understand that these fires have caused significant hardship to some of our policyholders," said State Fund President Jan Frank. "We are prepared to help our policyholders through credit relief as they return to normal operations."

Dedicated customer service lines have been set up to provide assistance to policyholders. State Fund will work with employers who are unable to report payroll figures or submit payments or have been cancelled for credit for reasons related to the fires.

State Fund representatives will review accounts and grant a 30-day credit extension, a 3-month payment plan or if necessary, withdraw cancellation and reinstate the policy.

Policyholders are encouraged to contact the customer service line, 800-388-0902 to make arrangements.

State Fund Files for 8.9% Increase

California's State Compensation Insurance Fund announced it filed a Jan. 1, 2009 revision to its rating plan, which it anticipates will result in an average 8.9% increase in collectible premium. Premiums for individual employers will also vary based on the experience of their particular rating class and experience modification, so individual employers will inevitably see more or less than the average change.

The principal driver of the rate increase is medical inflation. Over the past two years workers' compensation medical costs have been rising at a rate of about 12% per year, according the most recent report published by California's Workers Compensation Insurance Rating Bureau.

"This inflation did not affect rates while claims frequency was falling at double digit rates, but it appears that frequency declines have dropped off to about 2% per year," said Jan Frank, State Fund CEO and president.

"These are uncertain times for the economy, which makes rate setting challenging. We felt it was important to take a conservative approach to pricing," Frank continued, "While rate increases are difficult, it is important to remember that State Fund premium levels have fallen significantly since 2003, and even after this increase, will still be 52% below pre-reform levels."

State Fund's rate filing will apply to new and renewal workers' comp policies with an effective date on or after Jan. 1, 2009.

California State Fund Files 3.5% Premium Decrease

State Compensation Insurance Fund on Tuesday announced it filed a July 1, 2008 revision to its rating plan, which it anticipates will result in a 3.5% reduction in collectible premium.

While base rates will remain unchanged, State Fund has expanded its merit rating and claims-free discount plans to lower rates for policies with superior safety records. The new rate filing will affect new and renewal workers’ compensation policies with an effective date on or after July 1, 2008.

As State Fund expands its “claims-free” credit, some small employers with superior safety records will see their claims-free discount increase from 10% to 13% or 15%. Additionally, for the first time new business accounts to State Fund may also qualify for a claims-free credit based on experience with their prior carrier. "Promoting safe workplaces is a vital part of State Fund’s mission and small business is the backbone of California’s economy. We feel it is critical to pass on savings that recognize employers for maintaining safe workplaces," said State Fund President and CEO Janet Frank.

In addition State Fund is enlarging the range of accounts that qualify for its expanded merit rating plan allowing its underwriters greater discretion in pricing accounts generating more than $100,000 in premium. State Fund’s underwriters will be able to base more of the pricing decision on each individual account’s experience, providing the opportunity for deeper discounts on accounts with excellent safety records.

“Since 2003 State Fund’s rates have fallen steadily and this latest filing brings our cumulative decrease to 57% percent below pre-2004 reform levels” Frank added. "We have seen significant decreases in cost that are directly attributable to the 2004 passage of SB 899, the Governor's reform legislation, as well as AB 227 and SB 228 in 2003. State Fund has been committed to passing those savings back to employers in the form of lower rates to help California’s economy continue to grow," Frank said.