One of two vaunted State Compensation Insurance Fund bills had its hearing before the Assembly Insurance Committee. SB 1145, (Senator Michael Machado (D-Linden)). It passed the committee 8-0. It's had a relatively easy ride through the both houses despite serious flaws in the open meeting provisions that will do little to keep the scandal plagued carrier honest. In fact, the bill as drafted by State Fund Chairperson Jeannie Cain and SCIF's highly paid lobbyist will do more to prevent transparency than to encourage it.
In this funny movie created by JibJab, you can see the tap dance Cain performed with the Senator while creating the legislation. If you are unable to see the movie click this link:
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The gaping holes in the bill suggest to many industry sources that Machado is getting rolled by a combination of the remaining elements of the Jim Tudor regime, highly paid lobbyists, and SCIF's Board Chair who has no previous experience working in an insurance company.
SB 1145, subjects SCIF's currently top secret board meetings to the Bagley-Keene Open Meetings Act and the Public Records Act, but makes so many exceptions that it's nothing more than window dressing. Staffers in Machado's office say it was expected that the Senate Judiciary Committee would address the language, but the bill passed the Judiciary Committee in April with no changes to the open meeting provisions.
During the hearing, Machado acknowledged the concerns regarding the open meeting provisions and is committed to working with the assembly to narrow the exemptions. "I am committed to crafting a bill that protects proprietary information while providing sunshine," Machado told the committee.
But the truth may be farther from his statement than he realizes.
Machado appeared before the Assembly committee aside SCIF's lobbyist George Miller of Lang, Hansen, O'Malley and Miller. Jeannie Cain, chairwoman of SCIF's Board of Directors, sat close by in the audience.
Machado staffers say they're in "discussions" to get the language tightened up, but did not expect any amendments before yesterday's hearings. Staffers also say that State Fund has been "very cooperative."
| Workers' Comp Executive publisher Dale Debber notes that "so far this bill has escaped the attention of the general media but the public records aspects of it are horrendous and it creates issues, and possibly legislative precedents, that are very very large for the media, public access, and transparency. Looking at the Earthquake Authority as a model is one clear idea of a way this has been done before. There are a number of ways to fix this. Otherwise we would support the bill |
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"The idea is to have a little sunshine here, and we want to make sure the sunshine remains," says Kristi Stauffacher, staff person for SB 1145.
The Assembly Insurance Committee has also expressed concern about the open meeting exemptions. "Some of us think that the exceptions are a little too broad, a little too restrictive of public access," Mark Rakich, chief consultant for Assemblyman Joe Coto (D-San Jose), adding that the plan was to work with Machado's office to limit the exemptions.
Rakich says that he had a productive discussion this week with SCIF and Machado to discussing narrowing the exemptions. He says the parties have been working with Miller, and Jeanne Cain, chairwoman of SCIF's Board of Directors, sans Janet Frank. There are no amendments in print yet, but Rakich says it'll probably be amended just before it goes to the Assembly Government Organization Committee. The G.O. has jurisdiction over open meeting issues.
"SCIF will draft and present [amendments] to the working committee, [and] we'll see if it's based on the discussions we had," Rakich says, adding that SCIF knew it would have to take amendments to fix the overly broad nature of the open meeting exemptions, although "they probably didn't want to." The analysis also reflects the concerns about the current language. It reads in pertinent part:
"[T]he exemptions to the open meeting law provided by this bill may be too broad. For example, the authorization for closed sessions 'when considering matters related to claims' should be limited to 'individual claims where personally identifiable information would be disclosed.'
"At a minimum, the board should be required to publicly identify the general issues to be discussed when a proposed closed session is contemplated, publicly notice the reason for closing the meeting, and provide the public the opportunity to be heard on the issue," the analysis reads.
A provision in an earlier version of SB 1145 that would have allowed public input on exemptions to the open meeting was removed.
SB 1145 also authorizes SCIF to hire 6 new exempt positions including a chief financial officer and a chief risk officer. The bill has an urgency clause, so the hiring process can begin immediately.
The only other testimony came from Theo Pahos, lobbyist for the Association of California Insurance Companies. He said ACIC has not taken a position on the bill but expressed concerns about the open meeting provisions. He was confident they' be taken up in the G.O. Committee.
Assemblyman Coto has a companion bill AB 1874 that, in its current form, would increase the number of board members from five to nine, seven of whom would be appointed by the governor. The Assembly Speaker would appoint a representative from organized labor and the Senate Committee on Rules will appoint a member who was a policyholder of State Fund.
Rakich says additional amendments for AB 1874 are being circulated that include expanding the board to 11 members and tightening the qualifications on appointments as well as conflict of interest provisions. AB 1874 will be heard in the Senate Banking, Finance and Insurance Committee on June 18.
"I'm confident we're going to have two strong bills," Rakich says.
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