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Waste and Abuse at the WCIRB

Picture yourself in any store, or at the service counter of any business.  Whatever products you’re looking to buy or services you’re looking to retain are going to come with a price tag.  That price will tell you a lot about what happened before that loaf of bread made it to your grocer shelf or before that auto-mechanic could schedule your car maintenance.  Somewhere along the line, production costs, taxes, transportation fees and everyone’s paycheck all came into play.

So how much of your carton of milk goes to waste and abuse?  Would each package of dozen eggs be 30 cents cheaper if not for the burning of public dollars?

The reason I bring this up is because the California Workers’ Compensation Rating Bureau just hired a new president, William J. Mudge.  The WCIRB website does not disclose Mr. Mudge’s salary, but the Workers’ Comp Executive reports that the last president of WCIRB, Robert Mike, was paid $490,784 during his last full year as president.

For reference, the President of the United States is paid $400,000 per year and the Governor of California makes $173,987.  So where does the WCIRB get its funds, such that it can so generously compensate its president?

Well, California law requires all insurance companies to be members of a rating organization, and California’s rating organization is the WCIRB.  (See Labor Code section 11750 et seq.)  So, even though the WCIRB describes itself as a “private, nonprofit association comprised of all companies licensed to transact workers’ compensation insurance in California” it is essentially a quasi-government entity.  The WCIRB is then funded by the membership fees and assessments of its “members.”

Imagine if California passed a law saying that (1) everyone must visit an absolutely excellent and well written blog once a day; and (2) California’s excellent and well written blog is wcdefenseca.  Granted this would be an excellent and prudent law, but none the less, there is something a little fishy about it.  Here, you have every insurance company in the state forced into “membership” with this organization, which then takes its “non-profit” income and gives its president almost $500,000 in a yearly salary.  Really? Non-profit?

But, if it’s the insurance companies that are being robbed, who cares?  Right?  I mean, it’s not like tax dollars are being wasted – this is the WCIRB and California, not the city council of Bell!  Well, we should care – all of us.  When we think back to how that loaf of bread made it to the grocery shelf, some of the money we’re paying for it went to cover the increased workers’ compensation insurance costs of the grocer and the bread-baker.  And their increased workers’ compensation insurance premiums went to their respective insurance companies, who in turn had to pay more membership fees into the WCIRB so that the president of this non-profit organization could make more than the President of the United States.

On the other hand, maybe the gas station where you’re filling up didn’t get its costs inflated by this sort of behavior because they self-insured

Categories: News
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  1. January 26, 2012 at 8:06 am

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