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, 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, 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.