California Gov. Arnold Schwarzenegger has signed into law Assembly Bill 881 to crack down on workers’ compensation insurance fraud in the roofing industry. The bill, authored by Assemblyman Bill Emmerson, R-Redlands, requires insurers who issue workers’ compensation policies to contractors to perform annual audits of roofing company payrolls, and would allow them to recoup the cost of the audits through a policy surcharge. The bill also requires the Contractors State License Board to rescind licenses from roofing contractors that fail to have a valid certificate of workers’ compensation insurance or certification of self-insurance. The bill would require the Insurance Commissioner to direct the rating organization designated as his or her statistical agent to prepare an annual report on the roofing industry.
According to the Workers’ Compensation Insurance Rating Bureau of California, roofers pay four to 10 times above the average workers’ comp insurance premium. The average rate for all industries is $2.59 per $100 in payroll.
The legislation goes into effect on Jan. 1, 2007 and will remain in effect until Jan. 1, 2010.
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