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1171, Others from California -- Discussion?? - chrischris - 12-13-2007

What do you all think about the Audit results from State Comp Fund?

This was in the Sacramento Bee this week:

State Comp Fund Audit Story -- click on

RE: 1171, Others from California -- Discussion?? - 1171 - 12-13-2007

actually you want to read the full report from the insurance commissioner here
(it's almost 60 pages long)
not too much of it relates to claims handling but it looks like they've had some problems with their technology especially paying medical bills see page 39 of the report.
It's an operational audit. I believe they got a clean bill of health on their financials.
(the Dept of Insurance released an earlier report covering that part.)

they grew very fast when many private carriers went bankrupt and they had to take the coverage; obvious growing pains.....

RE: 1171, Others from California -- Discussion?? - chrischris - 12-13-2007

Lots and lots of money was mishandled, anyway you look at it. I have an appt. now but will be back later to read the full report.

Yes, an operational audit, but not routine and included over 100 findings.

RE: 1171, Others from California -- Discussion?? - 1171 - 12-13-2007

nothing criminal yet; will have to wait for the results of a CHP investigation to find out.
CDI does a lot of carrier audits.
here's the list
I'm not sure how much different it is from others.
SCIF has a response on their website

RE: 1171, Others from California -- Discussion?? - Babebahn - 12-13-2007

I felt the same was all operational handlings of ignored for payment. Shall we all say a slap on the wrist is what they will get?

RE: 1171, Others from California -- Discussion?? - chrischris - 12-13-2007

I still haven't found the time to read the complete report, but it appears they will get to add on additional board members and they are creating some more administrative positions and will need to convince legislature to approve the additions as part of the plan to revamp and get control.

The positions open are key financial positions. The board members only receive a stipend of $100 per meeting so they are looking to increase this in order to attract a pool of candidates.

For the past several years the internal control has been going down hill. Unauthorized purchases and checks to vendors without any backup was common place. Employees who left were never asked for keys and passwords were not changed. In essence claimants informaton was not secure.

There is a lot going on, starting at the top.

Thanks 1171 for the links. I did read the SCIF response this morning before I found the SacBee article, but thought it was very KISS.

When my hands settle down, I'll be back.

P.S. I wonder if SCIF would hire an IW to help get the budget under control. I'm looking for a CFO position that will accomodate my limitied use of hands. I still have a brain, but it's fuzzy sometimes. TongueTongue

RE: 1171, Others from California -- Discussion?? - chrischris - 12-13-2007

Hey 1171, I just realized that with THIS post, we are even steven with # of posts. How did that happen? Tongue

RE: 1171, Others from California -- Discussion?? - 1171 - 12-13-2007

There are lots of different audits of carriers. The dept of Insurance is not auditing for adherence to the labor code. That's done by the DWC audit bureau.
Each year they publish their findings and fines of the various carriers and companies as far as claims handling according to the work comp rules and regs.
Department of Insurance is looking for other things covering internal corporate management etc.
just to be clear there has been no finding of criminal wrong doing and these internal lapses are not subject to any penalties or fines and no laws were broken.
Audits like these are often used to help improve governance.

The big question yet to be answered is were these just shody and loose business practices or were they secondary to a coverup of kick backs and looting of assets. There is no way to know until or unless they find something illegal.
Just have to wait until CHP investigation is complete.

RE: 1171, Others from California -- Discussion?? - Babebahn - 12-14-2007

Wasn't this brought up last year when 2-3 of the previous employees got key positions in the Gov office? Isn't this the same thing that they were investigating then?

RE: 1171, Others from California -- Discussion?? - chrischris - 12-14-2007

Hi Babe, I couldn't get into your link without registering. I could be wrong, but I don't think it's the same issue. SCIF is always in the news for one case or another; which is understandable given they are the largest WC insurer in California. Prior to SB899, SCIF had over 50% of the WC market. SB899 lowered that percentage which is one reason I don't really understand the current problems.

SCIF delayed release of its annual financial report until a financial review was completed, ordered after its board of directors fired SCIF President James C. Tudor and Vice President Renee Koren.

The audit results were just released with 110 findings. SCIF was penalized $19 million dollars in claim benefit delays alone.

Tudor and Koren are under scrutiny because SCIF paid up to $25 million in administrative fees to organizations that administered employer "safety groups," which received discounted premiums. After the audit completion, this amount went up to over $53 million.

The safety groups were nothing more than SCIF generated newsletters being sent out.

Janet Frank, has been appointed the new President of SCIF. She has a job on her hands.

The governor is standing behind Janet Frank in her effort to revamp the SCIF.

Nothing illegal has been found, but how many IW's went without while SCIF administrators and employer groups were padding their wallets. How many IW's lost their homes, health, and family while TTD and PD checks were not being processed, and medical care was being held up in UR? Not illegal, but IMHO, it is CRIMINAL!