State Compensation Insurance Fund Financially Viable, Audit Finds

State Compensation Insurance Fund, a quasi-public entity that provides workers' compensation insurance to more than 50% of California employers, is financially viable, according to an audit the insurer released Wednesday, the Sacramento Bee reports. The audit, which was performed by consulting firm KPMG, confirmed that State Fund had net income of $712 million in 2003 and a surplus of $2.1 billion set aside for unexpected expenses. The audit also found that State Fund's reserves, which are used to pay workers' compensation claims, were $11.7 billion in 2003, Jim Zelinski, a spokesperson for the insurer, said. State Fund has "grown considerably" in recent years as private workers' compensation insurance carriers have gone out of business, the Bee reports. Insurance Commissioner John Garamendi (D) has said that State Fund's reserves are not adequate to handle the increase in business, but State Fund officials have disagreed. A spokesperson for Garamendi said that he would not comment on the audit until officials for the Insurance Department have reviewed the report (Evans, Sacramento Bee, 5/19).