Assemblyman Dave Jones (D-Sacramento) has introduced a bill that would stop the proposed sale of State Compensation Insurance Fund assets, require confirmation for State Fund board members, and set standards for adjuster training and claims caseloads. Besides squelching the sale, the bill appears to seek more accountability from State Fund for both its employees and its policy holders. According to Capitol sources, adjuster caseloads are “out of whack.”
State Fund is still reviewing the bill and was not ready to comment on its provisions.
Assemblyman Jones tells Workers’ Comp Executive that feedback from State Fund employees on caseloads is one of the reasons he introduced AB 1897. “There is no question that the bill is supported by the workers,” he says.
But he says he has also been following the debate over State Fund and has a keen interest in insurance issues and workers’ compensation. Jones is a candidate for insurance commissioner.
The controversial idea to sell some part of the State Fund is currently mired in litigation and has ground to a halt. The governor thought he could sell $1 billion in State Fund assets to help close the budget gap. The provision was included in the final budget last year, but Insurance Commissioner Steve Poizner filed a lawsuit challenging the sale. AB 1897 would close the door by completely repealing the sale provisions.
“There is broad consensus that [the sale] was not such a great idea, and there was the general unwillingness of the [State Fund] board to go through with it. This basically just puts the whole thing to rest,” Jones says.
The bill would also require that appointees to State Fund’s board be subject to the standard confirmation process. Jones says that this is just sound oversight.
“The Senate has confirmation authority over several quasi boards and commissions. This is an important one. It makes sense to have an additional layer of oversight,” Jones says. “
In addition, AB 1897 would require that any State Fund employee that "solicits, negotiates, or effects contracts of workers’ compensation insurance" to obtain all the appropriate licensing from the Department of Insurance. This would be at no cost to the employee.
State Fund would also be required to analyze the workers’ comp insurance industry standards and practices regarding adjuster caseload ratios and report to the Legislature by March 31, 2011 on how it compares. State Fund would also be required to produce a plan to bring State Fund’s standards and practices into line with other carriers.
“This is just making sure that [State Fund's] caseloads are on par with private industry standards,” Jones says. “[And the training] is to make sure that they have the same skills and can spend the same time with clients as in the private sector. This should have a beneficial effect on employers.”
A spokesman for the governor’s office says the governor has no position on the bill. But the governor’s office has been steadfast in its support of the SCIF sale.
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Filed by Bess Shapiro in Sacramento