Governor Joins Probe of Workers’ Comp Insurer
Gov. Arnold Schwarzenegger (R) on Wednesday said he is working with insurance regulators and the Legislature to "straighten out that mess" at the State Compensation Insurance Fund and "bring integrity back" to the fund, the Los Angeles Times reports.
The announcement was made the same day that Insurance Commissioner Steve Poizner (R) ordered a series of reforms for State Fund and a "top-to-bottom" audit (Lifsher, Los Angeles Times, 3/29).
State Fund last week dismissed its president, James Tudor, and Renee Koren, vice president of group insurance, as part of an internal review of operations. The firings were made in the wake of an external review of State Fund that uncovered poor accounting and mismanagement (California Healthline, 3/28).
Poizner told the fund's interim president that he wanted to receive an operational plan within 15 days (Lawrence, AP/San Diego Union-Tribune, 3/29).
The Senate Business, Finance and Insurance Committee on Wednesday held an investigative hearing of State Fund and heard testimony from Jeanne Cain, chair of the board.
Cain said State Fund is launching its own investigation into its business practices and has asked Attorney General Jerry Brown to investigate possible criminal matters that could involve millions of dollars.
Cain said the board also will work with Poizner and will submit to the Legislature proposed changes within 90 days (Chan, Sacramento Bee, 3/29).
The Workers' Compensation Insurance Rating Bureau of California on Wednesday recommended that Poizner reduce workers' compensation rates by 11.3% this summer, the Sacramento Bee reports.
The cut is the eighth straight reduction proposed by the bureau, which advises the Insurance Commissioner on rates. The recommended cut is based on a continuing slide in the cost to employers of treatment and benefits for injured workers, according to the Bee (Chan, Sacramento Bee, 3/29).