California Insurance Commissioner Steve Poizner pledged to continue improving the state workers’ compensation insurer, California State Compensation Insurance Fund. Speaking at the joint Chartered Property Casualty Underwriters and Risk and Insurance Management Society meeting in San Francsico yesterday, Poizner said he is “going to fix State Fund and return it to good health.”
In his 20 years of business, Poizner said “I’ve never seen anything like this,” noting the mismanagement of SCIF. “It has a $20 billion investment portfolio but no chief financial officer, and the board has no audit committee,” he said. SCIF needs better management controls and some “basic repairs,” he said.
Part of his goal for SCIF, Poizner said, is to establish a “clear vision,” so that there are identifiable objectives for the state insurer. He noted that SCIF originally was supposed to be the workers’ compensation insurer of last resort, but up until the state’s regulatory reforms, was capturing about 60 percent market share.
State worker’s compensation reforms were implemented in 2003 and continued through 2005, Poizner said prior to the reforms, the state workers’ compensation system was “totally broken and out of control.” While the reforms have started to improve the system, he said “some forces want to roll back workers’ compensation reforms.”
Poizer said the Department of Insurance is working to ensure that reforms are not rolled back, while working to improve the efficiency and managent of state fund. He said he wants to ensure that the overall workers’ comp market is “healthy and competitive,” and believes a market share in the low 20s is appropriate for SCIF.
Noting other workers’ compensation improvements he hopes to make during his term, Poizer indicated he has instructed the Workers’ Compensation Insurance Rating Bureau of California to improve the accuracy of its forecasting, since rates are based on the organization’s analysis.
The San Francsico CPCU/RIMS meeting was held at Le Meridien Hotel in downtown San Francisco.
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