State Compensation Insurance Fund board member Jim Richardson, president of The Doctors Insurance Company (TDIC), is voluntarily relinquishing his duties as a director for the state’s largest workers’ comp carrier. Richardson’s decision to resign avoids what some have termed “a potential conflict of interest,” and creates a vacancy on the 11-member board. But others think Richardson was exactly what State Fund needed and that there was no conflict.

Appointed more than a year ago to the board by then-Governor Arnold Schwarzenegger, Richardson brought welcome insurance experience and perspective to State Fund’s leadership team. But that experience seemingly morphed into a potential conflict after TDIC’s application to become a workers’ comp carrier was approved by the California Department of Insurance earlier this year (for past coverage, see Dental Malpractice…). Previously, TDIC wrote only professional liability and property coverage for dentists in the state but is slated to begin writing workers’ comp coverage this month in California and soon after in other states.

TDIC writes coverage only for dentists who are members of the association it is affiliated with. This is a minor part of the market and the potential for conflict is pretty limited, according to some.

Prior to running an insurance company, Richardson served as chief deputy insurance commissioner under then-Insurance Commissioner Steve Poizner.

Richardson declined to comment on the potential conflict, and State Fund was not talking about it beyond saying it was reviewing the situation when Workers’ Comp Executive looked into the situation. At the most recent State Fund Board of Directors meeting, member Frank Quinlan, chairman of the board’s audit committee, announced that Richardson had submitted a letter of resignation. He commented that Richardson did the right thing in tendering his resignation before it became a public issue. “We want to commend him for that and his service. He was a very valuable member of this committee,” he noted.

Later the full board approved a resolution extending its appreciation to Richardson for his service to the board. “We’re going to miss him and we wish Jim and his family the best,” noted Larry Mulryan, State Fund’s chairman.

Richardson’s departure now leaves three seats for Governor Jerry Brown to fill. Bill Zachry’s and Sheryl Chalupa’s terms expired earlier this year, although members can continue to serve until a replacement is named, and both are continuing to do so. All three seats are gubernatorial appointments.

A copy of Richardson’s resignation letter is available in our Resources section or by clicking here. 

(Filed by Brad Cain in San Francisco)