Workers’ Comp Insurer Demotes Top Attorney
State Compensation Insurance Fund on Tuesday announced that Charles Savage has been relieved of his duties as vice president and general counsel to the board of directors, the Los Angeles Times reports (Lifsher, Los Angeles Times, 5/24).
Savage will assume the position of assistant chief counsel to State Fund's corporate legal department, according to officials (Chan, Sacramento Bee, 5/24).
Julie Jenkinson, spokesperson for State Fund, said Savage's dismissal was not directly linked to an investigation into possible fraud and misappropriation of funds (Los Angeles Times, 5/24).
State Fund in March 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 that uncovered poor accounting and mismanagement.
Following the firings, Insurance Commissioner Steve Poizner (R) in March ordered a series of reforms for the state-backed workers' compensation insurer, including a "top-to-bottom" audit and immediate dismissal of all executives who were aware of improper payments (California Healthline, 3/28).
Jennifer Kerns, a spokesperson for Poizner, said the alleged fraud involves at least $600 million to $1 billion.
A state Senate committee also is conducting a review of State Fund. The California attorney general's office has been briefed on the investigations and early results from State Fund's internal audit (Los Angeles Times, 5/24).