S&P Puts State Fund on CreditWatch Negative

April 20, 2001

Ratings for the California State Compensation Insurance Fund were placed on CreditWatch with negative implications by Standard & Poor's on April 17.

The action was taken on SCIF's "A" counterparty credit and financial trength ratings based on concerns over the gradual deteriration of the fund's capital adequancy, a direct result of three consecutive years of net operating losses and rapid growth in written premiums in 2000.

S&P will be meeting with the fund's management in the near future to discuss these concerns.