Bill Would Increase Transparency at State Fund
Sen. Jackie Speier (D-San Mateo) and Auditor Elaine Howle on Wednesday called for the passage of a bill (SB 1452) that would allow the auditor to review the administration of the State Compensation Insurance Fund and investigate its finances, the Los Angeles Times reports.
State Fund is a government agency, but it does not use public money and does not publicly disclose records or allow reviews by state auditors. State Fund is the largest workers' compensation provider in the nation and sells about 40% of the workers' compensation insurance policies in California.
The legislation details the authority of the auditor to investigate whistle-blower complaints from State Fund employees. In addition, the bill would allow the Legislature to call for investigations of the company's administration and finances (Lifsher, Los Angeles Times, 8/10).
According to Howle, audits of the agency could show whether workers' compensation reforms enacted in 2004 "are working, whether rates are coming down, and is the state saving money" (Avalose, Contra Costa Times, 8/10).
The Assembly Appropriations Committee on Tuesday approved the bill, which has not received any dissenting votes in the Senate or Assembly. It now moves to the full Assembly for a final vote.
State Fund officials say it is a private enterprise that is exempt from most open-government laws. The agency has spent $180,000 since December 2004 on lobbying to defeat the bill and other legislation.
According to State Fund lobbyist George Miller, the agency is concerned that an audit report or related materials could "disrupt the marketplace" by revealing rate-making procedures, which could lead to violations of antitrust laws (Los Angeles Times, 8/10).
State Fund spokesperson James Zelinski said the company has suggested "an amendment to protect the confidentiality of our policy holders and to protect competitive proprietary information" (Contra Costa Times, 8/10).
Insurance Commissioner John Garamendi (D) supports the measure.
Gov. Arnold Schwarzenegger (R) has not taken a position on the bill (Los Angeles Times, 8/10).