SENATE BILL REPORT

SB 5750

BYSenators Anderson, Matson, Owen and Smitherman

Regarding industrial insurance fraud.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):February 15, 1989

Senate Staff:Jonathan Seib (786-7427)

AS OF FEBRUARY 13, 1989

BACKGROUND:

RCW 51.32 covers compensation rights and amounts under the state's industrial insurance system.  It provides that rules be adopted in accordance with RCW 34.04, which is effective until July 1, 1989.

The statute also provides that when the payment of industrial insurance benefits is induced by fraud, the fraudulent recipient must repay such payments with a penalty.  Repayment must be ordered within one year of the discovery of the fraud.  "Discovery" is not defined.

SUMMARY:

Rules adopted under RCW 51.32 are to be adopted in accordance with RCW 34.05, which goes into effect July 1, 1989.

Repayment of fraudulently received industrial insurance payments is to be made prior to the payment of any penalty.  Repayment must be ordered within three years of the discovery of the fraud.  Discovery means "the receipt of corroborative information in the possession of the department or self-insurer that would lead a reasonable person to believe that a payment of benefits under this title has been induced by fraud."

Appropriation:    none

Revenue:    yes

Fiscal Note:      requested February 10, 1989