The Workers' Comp Executive is the journal of record
for the workers' comp community in California.    
FREE Flash Reports
Arrow FREE to your inbox!




State Fund Responds

Award Winning Story


This publication has waged a well-documented campaign to test the State Compensation Insurance Fund's professed commitment to becoming a more transparent organization, a position it has maintained throughout the legislative debate over SB 1145. While Sen. Mike Machado's bill still awaits action by Gov. Arnold Schwarzenegger, SCIF—to its credit—edges toward openness, well, at least a little.

Last week the carrier responded (sort of) to this publication's repeated requests for the full terms and conditions of SCIF President Janet Frank's contract, though the document it released is a substantially sanitized overview of her employment agreement, which SCIF denied even existed two weeks ago. It does answer some of our outstanding questions and in the end paints a clearer picture of the issue for policyholders and the public alike. But it does not answer all of the questions.

The "Fact Sheet" confirms much of what we reported earlier, that Frank receives an annual salary of $450,000, and received a hiring bonus. First SCIF refused any info, then said it was a moving expense, now it is termed an exempt recruitment differential of $139,750 to help Frank move to California. The agreement does not require this money to be repaid if Frank does not relocate and, according to SCIF, she has not done so due to family and personal reasons. To this end, State Fund is paying for her weekly travel expenses to and from Denver, Colo., where her family lives, and also reimburses her at a rate of $140 a night plus tax for temporary housing while in San Francisco. There has been no explanation as to how long State Fund policyholders have to foot the bill for these extra expenses.

The carrier also disclosed more information about provisions for an annual performance bonus. In 2007, Frank was eligible to receive up to 15% of her salary as a bonus and the Fund says it paid her a $40,000 bonus in March 2008 for meeting "goals" it will not disclose, established at the time of her hiring. This year, the potential bonus is up to 30% of her annual salary and is based on six undisclosed strategic goals set by the board of directors.

Still troubling, though, is the process for determining what information is fit for public consumption, which is at the sole discretion of the quasi-public agency. Preliminary drafts, notes or interagency memoranda not ordinarily retained by the agency could be kept confidential. The bill also protects from disclosure any records related to discussions and communications about deliberations with contracting entities, while contracts themselves would be closed for a year and their rates would not be released for three years.

The legislation also would keep minutes from meetings closed to the public, and other records related to impressions and opinions are off-limits. The Joint Legislative Audit Committee, the Bureau of State Audits, the Division of Workers' Compensation and the Department of Insurance will have access to any information that SCIF deems proprietary and refuses to release under the terms of SB 1145, but the bill does not allow these agencies to make a public report available with all of the facts after an investigation or inspection.

Our ongoing concerns about the legislation aside, we welcome SCIF's tentative steps toward transparency and look forward to working with the carrier to open the doors even further.

Workers' Comp Executive, ISSN 1074-0988 Copyright © 2008 Providence Publications, LLC - All Rights Reserved.