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| | California's State Comp To Outsource Investigations Department. Contracts Will Go To A Few Big PI Firms.
By Lonce LaMon - December 16, 2011
State Compensation Insurance Fund conducts between 3,500 and 5,000 investigations related to workers’ compensation claims across the state of California every year. Now, the downsizing quasi-state agency will vend out their investigations department to possibly one or a few large investigative firms. They will no longer directly employ their own investigators and will not directly manage investigators by sometime in 2012.
They will soon have a top tier management investigative agency or agencies that will employ smaller PI firms and/or individual investigators. All current investigators presently working directly for State Comp as employees will be laid off by 2012.
State Comp is in the process of offering and receiving RFPs (Request For Proposals). The management PI firms offered contracts must have a completed SAA70 or SSAE audit.
The fear expressed from some insiders is that the management firm or firms offered the contracts will most likely be out-of-state firms or else foreign firms. Therefore, the money will go out of the state of California, or even the nation. It will wind up not 100% supporting the California economy.
Other testimony states that these large PI firms add layers of bureaucracy between the investigator and the examiner which results in poorer communication and delays. However, smaller local PI firms as well as individual private investigators will be able to work for these large management PI firms. This will bring work to local, smaller, independent PI firms, including one-man shops.
Downsizing in various ways including closing branch offices and the elimination of the management of workers’ compensation claims investigations will help State Comp become smaller while the state of California tries to become more competitive overall through the sale of workers’ compensation insurance through a wider choice of insurers.
We'll see what happens...
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