Facing criticism that it was trying to force State Compensation Insurance Fund to waste millions of dollars on additional training for its claims adjusters that would only make them more marketable to other carriers, a key union backed down from that proposal. In exchange it won passage of a bill that would repeal a plan to sell State Fund assets and would subject future appointees to its board of directors to greater public scrutiny.

This latter provision earned AB 1897, a bill by Assemblyman and insurance commissioner candidate Dave Jones (D-Sacramento), the continued opposition of the state’s carrier of last resort. State Fund’s board is already on record as opposing the sale idea, but it says a proposed requirement to subject appointees to Senate confirmation would unnecessarily politicize the process. State Fund’s 11-member board is appointed by the governor and the Legislature.

The bill is being pushed by the Service Employees International Union, Local 1000, which initially sought a requirement that any State Fund employee who “solicits, negotiates, or effects contracts of workers’ compensation insurance” would have to be licensed as a producer. This would have required extensive training on non-workers’ comp issues, such as fire and product liability insurance, and have provided no return for State Fund’s policyholders.

In presenting the bill, Jones told the committee he would cede to State Fund’s objections and was amending the language on training and licensure. “We reached an agreement to clean up the language so that we’re talking about certification,” he said, noting that this means State Fund employees will not receive a license “that they can use to move elsewhere.” But Jones pointed out that the amendment calls on State Fund to work with the insurance commissioner on improved training and certification standards.

The union also backed off on a call for an analysis of industry standards and practices for adjuster caseload ratios. The original bill called for a report on the findings and a plan for bringing SCIF into line with industry standards to be filed with the Legislature by June 30, 2011.

“We’ve been meeting with SCIF and have decided to drop language on the analysis,” Randall Cheek, SEIU’s legislative advocate, told the committee. “We came to an agreement on doing that in-house and them making the information available to us.”

After failing to get the bill up for a vote during its initial hearing before Assembly Insurance, the amendments helped it move out of committee on an 8-4 vote.

For past coverage on the bill, see State Fund Union…