R.I.’s Beacon Mutual CEO Expects to Lose Job If Carcieri Wins Battle; Giuliani Report Out Today

By | April 12, 2006

The chief executive of Rhode Island’s largest workers compensation carrier, Beacon Mutual Insurance Co., figures he could be looking for a new job as early as June if Governor Donald Carcieri gets his way.

CEO Joseph Solomon expects that if Beacon Mutual does not succeed in getting legislation to reduce Carcieri’s control over appointments to Beacon’s board passed by the time lawmakers adjourn in June, his days will be numbered. That’s because current law permits Carcieri to make new board appointments in November.

He said he hopes the legislation can be passed by enough votes to override a veto by Carcieri.

This and other aspects of the ongoing political dispute between executives at Beacon Mutual and officials in the Carcieri administration are discussed in an exclusive interview with Solomon in the upcoming April 17 edition of Insurance Journal magazine.

Asked if the Governor succeeds in making appointments in November, would he expect his job would be on the line, Solomon responded, “Absolutely. I think that it’s fair to say that.”

“I have a lot of respect for the previous Governors, who remember what the system used to be and recognize what this company has done. As a result, they have mainly reappointed directors who were involved in the system and in the reforms. This company has never been political and, unfortunately this administration seems to politicize everything and mainly this company right now,” the CEO maintained.

Solomon also expressed confidence that while ongoing audits of his company may uncover mistakes, there will be nothing major.

“I fully expect that there will be recommendations. But again, am I comfortable and confident that we are a good company doing good work and have the best interests of our policyholders at hand? Absolutely,” he told Insurance Journal.

Meanwhile, a report looking into Beacon’s corporate and pricing practices, including allegations of favoritism for clients with contacts on its board, is being released today.

Former Rhode Island Governor Lincoln C. Almond, the head of an ad hoc review committee Beacon formed to examine its pricing and other practices, will release its report today at a press conference in Warwick.

The report is based on findings by Giuliani Safety & Security, which is headed by former New York Mayor Rudolph Giuliani, and which the Almond committee hired to examine Beacon’s corporate practices and procedures, including those related to pricing policies.

The Almond Committee also includes Lieutenant General (Retired) Reginald A. Centracchio of the Rhode Island National Guard and Edward M. Mazze, dean of the College of Business Administration, University of Rhode Island, who also holds the Alfred J. Verrecchia – Hasbro, Inc. Leadership Chair in Business.

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