Secret Deal Between DWC, Fremont Exposed

June 22, 2000

June 22, 2000

The state Division of Workers’ Compensation (DWC) and Fremont Compensation Insurance Company entered into a secret settlement of a dispute over fines for the company’s illegal backdating of more than 6,100 claims files, the Workers’ Comp Executive reported yesterday.

According to the report, Fremont was accused of backdating the files in order to avoid the mandatory 10 percent penalty for sending notices late. The company was facing roughly $300,000 in fines.

The state’s investigation was launched after the DWC found files in Fremont’s Fresno office that had been backdated. In addition to the files found in the Fresno office, backdated claims files were allegedly found by state investigators at Fremont adjusting offices in Glendale and San Francisco.

The two groups apparently struck a deal in late March by which Fremont agreed to drop two lawsuits filed against the DWC and paid a $525,000 fine. Fremont also agreed to spend an additional $200,000 training its staff, and is required to have its systems monitored by outside auditors to ensure future compliance.

The DWC and Fremont allegedly tried to keep the deal covered up and agreed in writing to “not publicize” the settlement. However, the Workers’ Comp Executive obtained a copy last week after filing a Public Records Act request.

A copy of the agreement can be found at www.wcexec.com in the resources section.

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