1. Copyright 2012 EMPLOYERS. All rights reserved.EMPLOYERS and Americas small business insurance specialist are registered trademarks of Employers Insurance Companyof Nevada. Employers Holdings, Inc. is a holding company with subsidiaries that are specialty providers of workerscompensation insurance and services focused on select, small businesses engaged in low-to-medium hazard industries.The company, through its subsidiaries, operates in 30 states and the District of Columbia from 12 office locations.Insurance is offered through Employers Insurance Company of Nevada, Employers Compensation Insurance Company,Employers Preferred Insurance Company and Employers Assurance Company, all rated A- (Excellent) by the A.M. BestCompany. Coverage is not available in all jurisdictions and varies by company. See www.employers.com for coverageavailability.2

2. Ranney P. PagelerV.P. Fraud Investigations DepartmentEMPLOYERS Ranney has successfully referredmore than 600 criminal prosecutionsin 23 states for workerscompensation fraud-related crimes. Anti-fraud program has been thesubject of several news mediaarticles and broadcasts. Member of several anti-fraudorganizations and taskforces.3 3. Criminal Workers Compensation Fraud - Defined An intentional misrepresentation (lie) to gain aworkers compensation benefit. Prove the misrepresentations (lie): Evidence of misstatements or misrepresentations. Prove Materiality: If truth had been known, fewer benefits would have beenextended to the claimant. Reporting suspected workers compensation fraud is the same as reporting any other crime.4 4. What a Policyholder Should See in an InsurersAnti-fraud Program Many states mandate and regulate insurance carrier anti-fraud activities: A Special/Fraud Investigations Unit (SIU/FIU) An anti-fraud plan An investigation into cases of suspected fraud Anti-fraud training to insurance carrier staff Anti-fraud outreach to policyholders and producers Required anti-fraud warnings on claim forms and checks Communication with law enforcement, prosecutorial and otherauthorized governmental agencies Written anti-fraud procedures Even if not mandated in your state, these areas should be addressed and demonstrated by your insurance carrier. 5 5. What a Policyholder Should See in an InsurersAnti-fraud Program (Contd) Additional desirable anti-fraud program components: Identification verification (SSN, ISO, etc.) Provider enforcement OFAC Compliance Coordination with other insurer functions (Loss Control, Underwriting, Premium Audit) Participation in alternative prosecution strategies (Tax, Drug Diversion, Medicaid, Advertising, etc.) The Special/Fraud Investigations Unit should contain sufficient law enforcement/prosecutorial experience and knowledge to be successful in the areas of criminal investigation, prosecution and the criminal judicial system. 6 6. What a Policyholder Should See in an InsurersAnti-fraud Program (Contd) Coordination and integration of fraud investigations with claims investigations. Your Special/Fraud Investigations Unit (SIU/FIU) should: Review newly incurred claims for appropriate initial claimsinvestigations (Arising Out of Employment/Course ofEmployment, Subrogation, Statements) Review ISO (International Organization for Standardization) claimsearch information Review large loss/catastrophic claims (discussion of cases ancillary claim tools) Review all surveillance investigation results Review all re-opened or expanded benefit claims Maintain oversight of claims investigation vendors(surveillance, other outside investigations, recorded statements) Coordinate criminal prosecution with the claims administrative legalprocess A good test is: Ask your claim handler how to contact his/herSpecial/Fraud Investigations Unit. 7 7. Deterring Workers Compensation Fraud Some simple, proven steps that help prevent fraudulent workers compensation claims: Clearly and continuously convey to all employees a commitment toworkplace safety and a zero tolerance of workers compensation fraud Use insurer anti-fraud materials (posters, payroll stuffers, etc.) toreinforce this message Educate all employees on the adverse impact that workerscompensation fraud can have directly on each of them and theirindividual positions Contact your insurance carriers Special/Fraud Investigation Unitbefore a claim is filed if you believe or suspect a claim may be coming Report all claims in a timely manner Communicate accident inconsistencies to theclaim examiner8 8. When You Suspect Workers Compensation Fraud What should you do if you suspect workers compensation fraud is being committed against you?1. Immediately articulate your suspicion to the claim examiner.2. Articulate your suspicion to the insurance carrier Special/Fraud Investigations Unit.3. If you feel the need to go further with the referral of a suspected case of workers compensation fraud:i. Contact your Department of Insurance, your Attorney Generals Office, your local prosecutors office or local law enforcement agency, as appropriate, for your jurisdiction. 9 9. Valuable Resources The Coalition Against Insurance Fraud provides a wealth of state specific anti- fraud information relating to insurance fraud statutes, insurer requirements and contact information for government insurance fraud units at www.insurancefraud.org.10 10. Valuable Resources (contd) EMPLOYERS How to identify workers compensation fraud Top 10 warning signs (Anti-Fraud Posters/Stuffers)11 11. ContactYou may contact Ranney P. Pageler directly at EMPLOYERS Fraud Investigations Department: Fraudfighters@employers.com (800) 750-3939 While we can only handle suspected fraudulent cases forEMPLOYERS policyholders, please feel free to contact us with general workers compensation fraud questions. We can alsoprovide contact information to direct you to the appropriategovernment agency or insurance fraud unit for your jurisdiction.12