Insurance Commissioner to Overhaul Workers’ Comp Insurer
Insurance Commissioner Steve Poizner (R) on Wednesday is expected to order a series of reforms for the State Compensation Insurance Fund and deliver an operational plan within 15 days, the Sacramento Bee reports (Chan, Sacramento Bee, 3/28).
The announcement comes one week after State Fund dismissed its president, James Tudor, and Renee Koren, vice president of group insurance, as part of an internal review of operations (California Healthline, 3/22).
Poizner met with Gov. Arnold Schwarzenegger (R) on Tuesday to outline his reform plan, including a "top-to-bottom" audit and the immediate dismissal or suspension of all executives who were aware of improper payments, the Los Angeles Times reports (Lifsher, Los Angeles Times, 3/28).
Poizner also wants the agency to:
- Transfer internal audit oversight to ensure an independent review;
- Hire a chief financial officer and chief investment officer;
- Adopt conflict-of-interest and ethics policies for managers and directors; and
- Create an audit committee of board members (Sacramento Bee, 3/28).
Poizner also has directed fraud investigators to work with the attorney general's office to look for evidence of possible criminal activity at the agency.
A Senate committee on Wednesday will hold a hearing on the findings of an external review of State Fund that uncovered poor accounting and mismanagement.
The investigation, conducted by a law firm, found questionable payments involving discounted policies sold through outside associations with links to former board members, according to the Times.
The attorney general's office is evaluating the results of the investigation (Los Angeles Times, 3/28).