Parker, Kern, Nard & Wenzel
Legal Updates


Parker, Kern, Nard & Wenzel Defends Local Employer Against Aggressive Underwriting Action

On September 28, 2005, Parker, Kern, Nard & Wenzel, obtained a determination successfully defending a small, local ranching operation against an aggressive underwriting effort by State Compensation Insurance Fund. State Fund’s actions, had they gone unchecked, would have cost the local employer approximately $56,000 in premiums for the years 2004 and 2005.

The shares of the ranching operation were owned by the four surviving children of the founders of the operation. All four were directors of the corporation. Two of those were also employees of the corporation, and in 2004 those two decided to elect out of workers’ compensation coverage, pursuant to Labor Code section 3351(c). In an audit in late 2004, State Fund decided to refuse to accept this election, and advised the ranching operation it was being assessed a $56,000 premium. The ranching operation on its own attempted to persuade State Fund to change its position, only to be rebuffed and advised that State Fund would not accept their election.

The firm undertook representation of the ranching operation in August 2005. He sent a request for reconsideration, along with a package of information in support of the ranches’ position, to State Fund. The message of the request was clear: reconsider and reverse your position, or the firm, on behalf of the ranching operation, would pursue every legal avenue available. This included a Complaint and Request for Action up to and including an appeal with the Department of Insurance, or if necessary a lawsuit in Superior Court.

As a result of Mr. Haman’s actions, State Fund ultimately relented and reversed its previous position, thus allowing the exclusion as originally attempted by the two owners/employees of the ranching operation.

SCIF Letter