R.I. Gov. Carcieri Adds to Control Over Beacon Mutual

January 12, 2007

Rhode Island Gov. Donald Carcieri has increased his influence over the operations of the state’s largest workers’ compensation insurer by naming two new board members, a week after one of his business and political associates was named the new president and chief executive officer of the same company.

Carcieri has acted to replace two Beacon Mutual Insurance Co. board members whom he has tried to move off the board for months. He was blocked in those efforts by the courts until after their terms expired. Now he has replaced AFL-CIO secretary-treasurer George Nee and teachers union lobbyist Henry Boeniger, whose terms expired on Nov. 2, with Raymond C. Coia and Michael J. Ruggieri.

Coia is a coordinator for the New England Laborers‚ Tri-Funds in Providence. Ruggieri is president of the Rhode Island Building & Construction Trades Council in Cranston.

“The cost of workers‚ compensation insurance is felt especially among employers in the building and construction trades industry, where the risks of on-the-job injuries are so much greater. Ray Coia and Michael Ruggieri understand the impact that workers’ compensation costs have on these companies, and their expertise on the Beacon Mutual board of directors will be invaluable,” Carcieri said.

Last week, James V. Rosati, a banking and investment executive and current chairman of the R.I. Airport Corp., was selected to serve as president and CEO. Rosati worked with Carcieri at Old Stone Bank and Cookson America and also served as finance committee chair for Carcieri’s political campaign.

State law requires that all board members except the CEO position be filled by Beacon Mutual policyholders. By law, the governor has four appointments to the board. Coia and Ruggieri represent Carcieri’s third and fourth appointments since the mismanagement involving favoritism for certain clients and agents of Beacon Mutual was exposed earlier this year. Carcieri’s appointments also included Sister Therese Antone, the president of Salve Regina University.

Carcieri also reappointed former State Police Major Brendan P. Doherty. Doherty was originally appointed in February 2006 to replace Sheldon S. Sollosy, who had stepped down as the board chairman.

In addition to the four gubernatorial appointees, the Beacon board now includes three directors representing policyholders — Carl Hayes (chair), Richard DeRienzo and Carol Saccucci — along with the director of the state’s Department of Labor and Training, Adelita Orefice, and the company’s new CEO, James V. Rosati.

Each board member receives a $16,000 yearly retainer paid quarterly as well as a $300 per meeting stipend, according to the insurer.

The departure of Nee and Boeniger means that since December 2005 when complaints about management began to surface, six of nine member of the board have been replaced, including ousted former CEO Joseph Solomon, former chair Sollosy, John Holmes and Edward Brak.

Coia has worked as a coordinator for the New England Laborers‚ Tri-Funds since 1995. In that position, he coordinates the legal and administrative applications of the three Labor-Management Trusts collectively and separately. Prior to joining the Laborers, Coia was an attorney with Coia & Lepore Ltd. in Providence, where he concentrated in workers‚ compensation and social security disability insurance.

Coia is currently the president of the Laborers‚ International Union of America, Local 271. He serves on the Rhode Island Worker’ Compensation Governor’s Advisory Council, the Rhode Island Legal Services Board of Directors, the Coastal Resources Management Council, and chairs the Cranston Juvenile Hearing Board.

Ruggieri became the president of the Rhode Island Building & Construction Trades Council in 2005, which is comprised of 17 unions with approximately 10,000 members. He is also secretary and an executive committee board member of BuildRI, second vice president of the New England District Council of Ironworkers, business manager for the Ironworkers Local No. 37 in East Providence, and a committee member of the Rhode Island Apprenticeship Council.

Carl Hayes, chairman of the board of directors, welcomed the new members.

“We look forward to working with both of Beacon’s newest board members as we continue to reform the company,” said Hayes. “I plan to meet with both Mr. Ruggieri and Mr. Coia to get them up to speed on the issues we have encountered this past year and the issues we expect to encounter in the coming months.

The naming of Rosati as CEO brought to a close a five-month national search for a new president for the 250-employee company. Company officials hope it also signals an end to the political battles, executive firings and bad publicity that have haunted the insurer for the past year.

Beacon’s former president and CEO, Joseph Solomon, was fired along with the chief underwriter last April, after an audit headed by former Gov. Lincoln Almond found evidence of possible favoritism for certain large clients and agencies and lavish expenditures. That audit also triggered the other departures.

Rosati replaced Clifford Parent, the vice president of claims, who has served as interim president since Solomon’s departure in April.

Beacon Mutual is a nonprofit independent corporation created by the state in 1991 to provide workers’ compensation insurance. It controls more than 90 percent of the market.

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