JUNE 30, 2004 - Travis County’s 147th District Court grand jury indicted Henry Prince of Houston for workers’ compensation fraud-related charges today. Prince allegedly used a “double-dipping” scam on Texas Mutual Insurance Company to illegally receive approximately $3,400 in temporary income benefits (TIBs).
State law allows some injured workers to receive TIBs when their on-the-job injuries prevent them from returning to work. The law also requires each worker to notify the workers’ compensation insurance carrier when he or she begins working again.
Double-dipping scams involve allegedly injured workers who claim that they are unable to work—so they can continue to receive TIBs—when in fact they are working, usually for a new employer. In effect, they get paid twice: once for working at a new job and again for being too hurt to work.
If left unchecked, double-dipping scams can lead to a higher workers’ comp insurance premium for the first employer when the company renews its coverage. The scams may also encourage other employees to fake injuries to collect benefits, which ultimately contributes to higher workers’ compensation costs for everyone.
With every TIBs check it issues, Texas Mutual Insurance Company includes a statement reminding the worker to contact the adjuster if he or she returns to full-time or part-time work. Additionally, Texas Mutual® adjusters often contact workers directly to determine their work status.
The Prince investigation is part of the Texas Mutual® “Zero Tolerance of Fraud” program. Texas Mutual Insurance maintains three teams of investigators permanently assigned to investigate every report of suspected fraud.
Note: A grand jury indictment is a formal accusation--not a conviction--of criminal conduct.
JUN 29, 2004 - Texas Mutual Insurance Company awarded the Texas Oil and Gas Association (TxOGA) workers’ compensation Safety Group with $245,320 of group dividends.
Texas Mutual® group dividends are separate from the $50 million of general and special dividends that Texas Mutual Insurance Company will award to qualifying policyholders in 2004. Many TxOGA members may receive part of the group dividend as well as a general and special dividend.
"TxOGA has done an excellent job managing the growth of the group," said Ken Lauber, Texas Mutual® vice president of field operations. "TxOGA members are constantly striving to make their workplaces safer, and we’re optimistic that TxOGA will continue to work on improving its overall loss ratio and increase its premium volume."
State law prohibits insurance companies from guaranteeing future dividends; however, Lauber said that Texas Mutual Insurance Company’s philosophy is to reward its top groups when money is available. The Texas Department of Insurance approves all Texas Mutual® dividends.
TxOGA is the oldest and largest organization in the state representing petroleum interests. It continues to serve as the only organization in the state that embraces all segments of the oil and gas industry.
Texas Mutual Insurance Company is the state’s leading provider of workers’ compensation insurance and the leading writer of safety groups in Texas.
JUNE 22, 2004—Texas Mutual Insurance Company held its annual policyholder meeting today. In 2003, the company saw record written- and earned-premiums, and Chairman Martin H. Young Jr. took the opportunity to credit that success to the board of directors, management and all the company’s employees.
”Texas Mutual’s market share has risen from 15 percent of the Texas workers’ compensation market in 2000 to over 25 percent in 2004. We conducted more business last year than ever before, and we did it with virtually the same number of employees,” said Young. “That’s because Texas Mutual has a lot of very smart people who work very hard. They’ve helped implement new programs and technological solutions to increase our overall efficiency.”
Young also reminded the attendees that the board approved a $50 million dividend plan last month for qualifying policyholders. The plan includes $25 million in general dividends plus another $25 million in special dividends, resulting from the company’s exceptional 2003 financial results.
President Russell R. Oliver noted that the general and special dividends are separate from the company’s group purchase dividend program. Year-to-date, select Texas Mutual® Safety Groups have received over $682,000 of dividends.
Oliver also reminded the crowd that workers’ compensation insurance is a complicated business and that the Texas workers’ compensation system is likely to undergo substantive changes in the next legislative session. He invited the policyholders in attendance to register for the company’s “You Need to Know” service, which provides free email updates on progress toward improving the workers’ compensation system.
JUNE 9, 2004 - A Travis County district court accepted an Odessa man’s plea bargain to reduce his workers’ compensation fraud case from a State Jail Felony to a Class A Misdemeanor today. William Scott Anderson received deferred adjudication probation for 180 days confinement, and he must pay court costs and make restitution of $1,530 to Texas Mutual Insurance Company.
Anderson allegedly suffered an on-the-job injury while working as a derrick man for Mattlock Drilling LTD of Midland. He claimed he was unable to return to work because of the injury, and Texas Mutual Insurance Company began paying temporary income benefits (TIBs).
When another drilling company called to check Anderson’s references, Mattlock Drilling alerted Texas Mutual Insurance Company. The ensuing Texas Mutual® investigation uncovered evidence showing that Anderson had taken a new job, despite telling his Texas Mutual® adjuster that he was unable to work.
Investigators call this sort of scam “double-dipping” because, in effect, the perpetrator is getting paid twice: once for working at his new job and again for being too hurt to work at his old job. If allowed to continue, double-dipping scams can lead to a higher workers’ comp insurance premium for the first employer when the company renews its coverage.
Texas Mutual Insurance Company includes a statement with every TIBs check reminding the claimant to contact the adjuster if he or she returns to full-time or part-time work. Additionally, Texas Mutual® adjusters often contact claimants directly to determine their work status.
The investigation was part of the Texas Mutual® Zero Tolerance for Fraud program. Texas Mutual Insurance Company maintains three teams of investigators permanently assigned to investigate every report of suspected fraud.
JUNE 7, 2004-Texas Mutual Insurance Company awarded the Emergency Service Organization (ESO) workers’ compensation Safety Group with $92,762 of group dividends. The group dividends are separate from any general dividend that ESO members may receive.
”We’re very pleased with ESO’s safety efforts,” said Ken Lauber, Texas Mutual® vice president of Field Operations. “With continued focus on safe workplaces and accident prevention, as well as managed growth of the group, we’re optimistic that ESO can continue improving its overall loss ratio, increase its premium volume, and possibly earn future Texas Mutual® group dividends.”
A group’s volume and loss ratio are key components in determining whether it qualifies for a dividend. The greater the group’s volume and the lower its overall group loss ratio is, the higher its dividend percentage will be.
ESO members are eligible for Texas Mutual® group dividends as well as possible general dividends. Although insurance companies cannot guarantee future dividends, Lauber said that Texas Mutual Insurance Company’s philosophy is to reward its top groups when money is available.
MAY 26, 2004—Approximately 28,000 Texas employers* will receive a share of $50 million in dividends from Texas Mutual Insurance Company.
The Texas Mutual® board of directors unanimously approved the 2004 dividend plan, which includes an annual component for qualifying customers whose policies expired in 2003 and a retention component for select, longtime customers. The plan also includes a special dividend.
The annual component is for qualifying policyholders with policies that expired in 2003. The retention component rewards qualifying policyholders for up to five consecutive years of low claim loss experience, ending with the policy that expired last year. The special dividend is the result of Texas Mutual Insurance Company’s exceptional financial results in 2003.
“These dividends will reward our loyal policyholders whose low claim losses have contributed to our success,” said Texas Mutual® Chairman Martin H. Young Jr. “We hope these dividends will contribute to their success by lowering their workers’ compensation costs.”
Only Texas Mutual® policyholders with in-force policies on June 15, 2004 may qualify for the plan, which still requires Texas Department of Insurance approval. State law prohibits policyholders enrolled in the company’s insurer of last resort program from receiving dividends.
Mr. Young also noted that these dividends are separate from the company’s group purchase dividend program. Texas Mutual® Safety Groups received approximately $1.3 million in dividends last year.
Today’s announcement marked the sixth consecutive year for Texas Mutual Insurance Company to offer general dividends. Insurance companies cannot guarantee annual dividends; however, Mr. Young said, “Our philosophy is to share the company’s financial success with our good customers.”
*Editor's note: Original estimates suggested approximately 28,000 policyholders. Final calculations indicated approximately 27,000 policyholders qualified for a dividend.
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APRIL 23, 2004 – Texas Mutual Insurance Company reported today that Enrique Rodriguez of Houston pleaded guilty to workers’ compensation fraud-related charges.
The 390th District Court of Travis County sentenced Rodriguez to two years deferred probation and 100 hours of community service. The court also ordered Rodriguez to pay back the $1,600 in benefits he fraudulently obtained from Texas Mutual Insurance Company.
Rodriguez allegedly hurt his knee in an on-the-job injury in November 1999. His employer became suspicious after hearing conflicting descriptions of the alleged incident. A Texas Mutual® investigation obtained surveillance video and medical records that aided the prosecution of Rodriguez.
The video showed Rodriquez working in his yard, carrying large landscaping timbers, and jumping in and out of the bed of his truck as he unloaded dirt from the truck. The medical records, along with information from his treating doctor, helped the prosecution prove that Rodriguez was feigning his disability.
The Rodriguez investigation was part of the Texas Mutual® “Zero Tolerance for Fraud” policy. Texas Mutual Insurance Company maintains three teams of investigators permanently assigned to investigate every report of suspected fraud.
APRIL 9, 2004—Texas Mutual Insurance Company is pleased to announce Harry Mahler, senior vice president of underwriting and loss prevention. Mahler will oversee the company’s corporate and regional underwriting, loss prevention, and marketing efforts. Texas Mutual Insurance Company is the state’s largest workers’ compensation insurance provider, with offices in Austin, Houston, Dallas and Lubbock.
Mahler has over 25 years of experience in underwriting and loss prevention management at field and senior levels. A graduate of Duquesne University in Pittsburgh, Pennsylvania, Mahler has worked with national and multinational carriers on the East and West coasts, as well as in the Midwest. He calls Texas “a welcome new venue” in his career.
APRIL 8, 2004—Texas Mutual Insurance Company reported today that Doze Construction Co. Inc. of Gun Barrel City pleaded guilty to workers’ compensation fraud-related charges. Judge Julie Kocurek of the 390th Travis County District Court ordered the company to pay a $100 fine to the state, plus $17,000 in restitution to Texas Mutual Insurance Company.
Doze Construction illegally transferred employee payroll into an uninsured second company, a scheme investigators call using a “shadow company.” Doze Construction then applied for workers’ compensation insurance through Texas Mutual Insurance Company, but it reported only a fraction of its true payroll.
Because insurance companies use payroll as part of their premium calculations for workers’ comp coverage, the scam allowed Doze Construction to receive a much lower premium than it actually owed.
“Premium fraud is a serious crime,” said Elliot Flood, Texas Mutual® vice president of special investigations. “It’s bad for honest competition in the marketplace, and it’s bad for the company’s workers, who are entitled to workers’ comp benefits, a fact often hidden from them when an employer uses a shadow company scam.”
When Texas Mutual® investigator Sandra Milburn uncovered evidence against Doze Construction, she contacted Assistant District Attorney Elizabeth Andrus who prosecuted the case on behalf of the Travis County District Attorney office. In October 2002, a Travis County Grand Jury indicted owners Stanley and Cynthia Doze on charges of “Securing Execution of a Document by Deception,” a state jail felony.
Judge Kocurek dismissed the cases against Stanley and Cynthia Doze, as recommended by the State, in return for the company’s guilty plea and immediate restitution.
The Doze Construction investigation is part of the Texas Mutual® “Zero Tolerance of Fraud” program. Texas Mutual Insurance maintains three teams of investigators permanently assigned to investigate every report of suspected fraud.
APRIL 6, 2004 – Texas Mutual Insurance Company announced Terre Tomblin is the new supervisor for its Organized Fraud Unit. Ms. Tomblin brings over 20 years experience in fraud investigation supervision for the United States Air Force’s Office of Special Investigations (OSI).
The OSI is the civilian agency that investigates major fraud against the Air Force.
Elliott Flood, Texas Mutual® vice president of special investigations, says that the types of cases Tomblin handled for the Air Force have a lot of similarities to organized workers’ compensation fraud. Unlike an isolated fraud crime committed by an individual, organized fraud cases usually require detailed investigations, intense record reviews, and an in-depth understanding of Texas Workers’ Compensation Commission rules.
“We are very excited about adding Terre to our fraud-fighting team,” said Flood. “We brought in several of our investigators to share their favorite fraud cases with her to help her learn some of the nuances of investigating workers’ compensation insurance fraud, and she has already demonstrated a quick grasp of the key elements.”
Texas Mutual Insurance Company maintains three teams of investigators permanently assigned to investigate every report of suspected fraud. Click here to view the latest fraud-fighting success stories.
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