Insurance commissioner Steve Poizner announced moments ago a lawsuit to stop the sale of State Fund assets by the governor’s office and Dept of Finance. The asset sale was authorized by AB X4 12 as part of the budget enactment.

The suit, to be filed Friday in Sacramento Superior court will ask for an injunction on constitutional grounds, citing article XIV Section 4 of the State Constitution which Poizner holds does not allow State Fund assets to be used for anything other than workers’ comp.

Commissioner Poziner says the Dept. of Insurance has information that Finance is pursuing the sale. However, the legislature removed from the bill the funds allowing Finance to proceed.

He says—that he will not allow SCIF to be “robbed or have its assets pilfered.” Poizner says too many small businesses depend on State Fund for him to allow its finances to become perilous. Poizner went on to say that the governor’s actions are creating instability in the market place, which will cause workers’ comp rates to skyrocket.

The Department is using both its in-house counsel led by Adam Cole, its general counsel and outside counsel Steven Mayer of Howard, Rice, Nemerovski, Canady, Falk & Rabkin.

Poizner says there is no room for compromise, and that he will not permit State Fund to be plundered.

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Filed in Sacramento by Dale Debber