Wednesday, March 23, 2016

CIGA Technicalities

One of my pet projects is getting the next generation into the work comp world to take up the slack of all us gray hairs (or in my case, no hair) who are moving on to other pastures. In that vein, today I head over to my law school alma mater, Pepperdine University in nearby Malibu for a lunch time lecture on careers in this industry.

I tell the "kids" about the great variety of specialization in work comp, about the mission of doing good things for people in bad situations, and how the technical nuances in work comp law requires particular legal skill and expertise.

Last year we had about 35 "kids" attend, suckered in by a free Chick-Fil-A lunch and then enraptured by the presentation, and ultimately a half dozen or so asking for more information and training to start a rewarding work comp career.
Pepperdine's annual 09/11 memorial display.

For the technical part, I can point to this morning's WorkCompCentral news, where the California Insurance Guarantee Association appears twice today, in court cases that might be baffling to an outsider, but might make perfect sense to one of the Pepperdine law students considering a path into work injury law.

In the first instance, a federal trial judge ruled last week that the California Insurance Guarantee Association cannot avoid its obligation to reimburse the Centers for Medicare & Medicaid Services even though the government did not meet the claims filing deadline under state law.

CMS is asking for $308,401 that it spent on treatment costs for 10 beneficiaries who it says were covered by policies that CIGA was administering on behalf of defunct Fremont Indemnity Co., Legion Insurance Co., and the Superior National Insurance Cos.

The deadline for presenting claims based on those entities had long ago passed, last decade. The court record isn't clear on when CMS made those claims, although there is no dispute that CMS did not meet the deadlines imposed by state statute.

U.S. District Court Judge Otis D. Wright II said the United States is excluded from the operation of such state laws because of its sovereign immunity and ruled that the statutory deadlines are not binding on CMS.

The U.S. Supreme Court's precedent ruling in U.S. v. Summerlin established that once the federal government asserts a claim, "it cannot be deemed to have abdicated its governmental authority so as to become subject to a state statute putting a time limit upon enforcement."

A federal District Court of Massachusetts case back in 2001, which Wright distinguished in his opinion, found that the rule from Summerlin "cannot overcome the particular niche for state authority carved out by the McCarran-Ferguson Act, which was enacted by Congress five years after Summerlin was decided." The 1st U.S. Circuit Court of Appeals affirmed that decision one year later.

Wright said he disagreed because "protecting the insurance business from unwitting federal legislative control is a far cry from subjecting the federal government as a sovereign to state control."

My bet is that CIGA will take this case up the appellate ladder.

Meanwhile the 2nd District Court of California ruled that carriers which have contribution agreements between them arising out of a work comp claim doesn't bind CIGA when one of them goes under.

Ullico Casualty Co. and Care West Pegasus Modesto both wrote policies for Superior Center Concepts. They jointly agreed to settle a workers' compensation claim by Rosa Lopez, a Superior Center employee, before Ullico went bankrupt in 2013.

The terms of the settlement provided that Care West would be responsible for 52% of Lopez's treatment charges and Ullico would be responsible for the remaining 48%. Care West and Ullico also agreed to split the cost of Lopez's medical-legal expenses evenly.

Care West objected to holding the whole bag.

The 2nd DCA said the statute is clear and that Care West is "other insurance" for purposes of Insurance Code section 1063.1.

Mind-numbing technicalities...

Okay, perhaps the "kids" I will lecture to at Pepperdine today won't be so interested in CIGA, CMS and contribution limits, but certainly they can appreciate that the technical aspects of work comp law, and insurance guarantee law, commands a high level of legal prowess, and if another half dozen this time ask for more career information today my job will have been done.

There's a reason workers' compensation was one of the first specializations recognized by the California State Bar back in 1973. That fact should be a source of pride for legal practitioners in the field, and I believe is an achievement goal for this next generation of lawyers ready to graduate in a few months.

No comments:

Post a Comment