In this issue...
Martinezs v. Neal and Son . 1
Vol. X No.9
September 2004
COMPENSATION
NEWS
MONTHLY REPORT
CIGA NOT RESPONSIBLE FOR AN INSOLVENT
CARRIERS DELAY IN PAYMENT OF BENEFITS
This is an en banc
decision of the
Workers'
Compensation
Appeals Board
(WCAB).
T
he applicant sustained
an admitted injury in
1999. Fremont
Insurance assumed responsibility.
The applicant's primary
treating doctor asked for
authorization for surgery and
submitted the proper
documentation to Fremont.
Surgery was not timely
authorized. Fremont finally
authorized surgery three months
after the request. Fremont
subsequently became insolvent.
The case was tried and a
Workers' Compensation Judge
(WCJ) found a penalty on behalf
of the insolvent carrier California
Insurance Guarantee Association
(CIGA).
The penalty was appealed by
CIGA. The WCAB issued this
decision.
CIGA's mandate is that it
only pays "covered claims".
Insurance Code 1063.1 (c) (1)
sets the definition for "covered
claims". Sections 1063.1 (c) 3
through 12 deals with the
exceptions. Section 1063.1 C (8)
was amended for awards issued
on or after January 1, 2004. This
section deals with penalties.
The WCAB indicated that the
language is clear that "covered
claims" do not include an award
made pursuant to Labor Code
section 5814 or 5815.
Therefore no penalties will
apply to CIGA in this case.
It is too early to determine
whether a writ will be filed on
this case. If one is filed it would
seem the same result will come
about from the appeals court
based on the plain meaning of the
statute.
Editor: Harvey Brown
Firm: Samuelsen, Gonzalez,
Valenzuela and Brown
Address: 18500 Von
Karman #470, Irvine
Phone: 949 252-1300
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