The Workers’ Compensation Insurance Rating Bureau of California (WCIRB), Insurance Commissioner Dave Jones’ statutorily created statistical agent, is refusing to release any information on the search for a replacement for its outgoing president Bob Mike. That’s funny because one would think it’d have a lot of applicants for a job that pays nearly $500,000 per year plus a generous expense account and benefits. In fact, of its $30M budget, nearly 6%—$1.7M—goes to its top five executive salaries.

The reason WCIRB’s executives are not very forthcoming  say multiple inside sources, is to assure selection of one of the bureau’s own—specifically, Dave Bellusci, vice president and chief actuary. Sources tell Workers’ Comp Executive that Bellusci is the choice of some but not all board members.

Workers’ Comp Executive has uncovered some—we can only say amazing—facts on the machinations behind the search, which seem to validate the bureau’s plans. By not providing the Governing Committee with several candidates to choose from, one source reasons, the choice will be the one that the executives want. But the historical salaries of WCIRB executives, revealed later in this article, provide an accurate view of what the organization really is.

If Bellusci is the one to beat, it also must be remembered that he is responsible for creating projections that consistently have missed actual outcomes, and whose rate recommendations have been adopted principally by the Governing Committee, rejected year after year, and frequently proven to be—to the extent they were accurate—not the whole story.

WCIRB represented that it has retained a national executive search firm to look for candidates in a June 1 news release announcing Bob Mike’s retirement. The announcement came just weeks after Workers’ Comp Executive called for Mike to step down so that a new leader could create a more transparent organization.

But now, through its spokesperson Jack Hannan, WCIRB repeatedly refuses to release the name of the search firm. Hannan tells Workers’ Comp Executive it will not release the name of the recruiting firm so it can “protect the privacy of potential candidates and allow the Governing Committee to conduct a full and proper search.” So how exactly do candidates get their curriculum vitae to the recruiter? “Mail it to me marked personal,” the spokesperson told Workers’ Comp Executive when we called a second time to confirm the refusal.

Hannan also refused to say if any, or how many, candidates have applied or been interviewed. He says he cannot release any more information on the process beyond what has been released.

But assuming there is more than one candidate, who will make the decision?

Public members appointed by officials to protect the public from insurer members who control the Governing Committee won’t have any say in the matter. If past actions predict the future, they may not even be able to be in the room when insurer members discuss and interview candidates. Public members aren’t allowed to vote on the position, and may never find out or know who the other candidates are, if indeed there are other candidates.

How can that be?

The answer: artful manipulation by insurance companies brought upon Legislatures past.

While Insurance Code, Section 11751.1(h), requires WCIRB to “permit” four members of the public to sit on its board, and under 11751.3(b) be allowed to attend and participate in any meeting, present WCIRB executives have a proven history of excluding public members from important information and deliberations ( Workers’ Comp Executive exposed that practice in Bureau Disciplines but Doesn’t Disclose…).

But Section 11751.35.(a) really lays it out: “A public member shall be entitled to vote on all issues involving pure premium rates, classifications, rating plans, rating systems, manual rules and policy, and endorsement forms which are properly brought before the committee.” Present WCIRB executives through these and other actions historically view the law as permissive, not preventive. There is no statutory requirement that public members be allowed to vote on anything outside the stated items, therefore the reasoning will be that public members can’t do so. That it is not prevented from allowing it, and that the intent of the Legislature may have been different notwithstanding, the present executives, absent this sunshine, are unlikely to permit such a vote.

Truly Exorbitant

Hannan also refused comment on how much the position pays. But documents provided to and verified by Workers Comp Executive exposed the facts of the executives’ salaries to the light of day.

One workers’ comp insurance industry executive we spoke with called this a “truly exorbitant” salary.

Hannan would not say when a replacement would be chosen but referred us to the news release on Bob Mike’s retirement, which states that the bureau will make a selection sometime in the 4^th quarter. Mike will retire at the end of December.

About Workers’ Compensation Insurance Rating Bureau of California

WCIRB is a private bureau—owned by insurance carriers—organized as a “nonprofit” that performs many governmental functions and duties, which in other states are performed by actual government agencies. Those include: 

• Inspecting employers and setting their classifications (appeals of which go to administrative law judges, just like other governmental functions)
• Acting as statistical agent in gathering and analyzing all payroll data from every employer in the state by employer (WCIRB has employer payrolls as does EDD)
• Acting as statistical agent in gathering claims data for every workers’ comp carrier in the state, including specific payer data
• Creating X-Mods (experience modifications) for all qualified employers in California
• Making rate recommendation to the insurance commissioner and using its special status as antitrust-exempt to share combined insurer data among insurers
• Creating special reports for the Legislature and governor

-30-

(Filed in Sacramento by Dale Debber)