Workers’ Comp Insurer to Issue Refunds of Alleged Overcharges

California’s biggest workers’ compensation insurer will refund millions of dollars to Southland business owners as a result of a state investigation, it was learned late Wednesday.

Insurance Commissioner John Garamendi will announce today details of his agency’s probe into the State Compensation Insurance Fund, which covers roughly 25% of all workers in the state.

The insurer, also known as SCIF, was established by the state as a nonprofit insurer more than 50 years ago to ensure that small businesses would be able to buy workers’ compensation insurance. As the biggest insurer in the state’s workers’ compensation system, it has been the subject of much criticism from employers and injured workers alike.

In an advisory concerning today’s announcement, the state Insurance Department said that as a result of its investigation, a workers’ compensation insurer that “overcharged premiums and delayed coverage to thousands of Southern California employers will refund millions of dollars to those employers and institute other reforms.” A spokesman for the Insurance Department declined to elaborate, but a separate source indicated that the insurer involved is San Francisco-based SCIF.