Posted on 08/10/2006 8:40:42 AM PDT by calcowgirl
Senator charges state's largest workers' comp provider with enlisting lobbyists to block probe
A state lawmaker on Wednesday accused California's largest provider of workers' compensation insurance of attempting to obstruct efforts to fully audit the carrier, including how rates are set on premiums to pay injured workers.
The accusations marked the latest skirmish in a battle over a proposed bill that would enable the state Legislature to audit the administrative and business practices of State Compensation Insurance Fund. State Fund is the largest workers' comp carrier in California with a roughly 38 percent market share.
State Fund has spent an estimated $178,000 on an outside lobbyist who is attempting to coax the lawmakers into watering down the bill, claimed the legislation's author, state Sen. Jackie Speier, D-San Francisco.
"Either they have too much money to spend, or they have something to hide," Speier said of State Fund. "They need to get back to helping injured workers and helping employers who are having a difficult time finding workers' comp insurance."
But State Fund officials said the insurer does not seek to block or erode the legislation that would authorize probes by the Bureau of State Audits, acting at the behest of the state Legislature.
"We're an open book," said James Zelinski, a spokesman for State Fund. "We report regularly to the Legislature and the governor's office. We welcome scrutiny."
State Fund officials insist they do not oppose the entire legislation, only one provision in the bill. Zelinski said State Fund wants to shield its customers from unwanted scrutiny and guard the workers' comp market from harm.
"All we have done is suggest an amendment to protect the confidentiality of our policy-holders and to protect competitive proprietary information," Zelinski said.
The insurance carrier wants to be sure that harmful information is not released publicly through an audit, he said.
The Legislature could use a probe to shed light on whether State Fund's workers' comp rates are too high or too low, or whether its market share is appropriate. Lawmakers could also use the state audits to gain insights into the insurance carrier's operations and administrative activities, according to State Auditor Elaine Howle.
"We consider this very important legislation," Howle said. The Legislature, through a committee, would have to authorize any audit of State Fund by the auditor, if the bill passes. The legislation was approved Wednesday by the Assembly Appropriations Committee and next goes to the full Assembly. If the bill, SB 1452, clears that hurdle, it would go to the full state Senate.
The Legislature could also employ full-scale audits to evaluate broader issues related to workers compensation. For instance, Gov. Arnold Schwarzenegger and state lawmakers pushed through sweeping reforms of workers' comp in 2004, on the heels of years of complaints that the system was broken and employers were being crushed by skyrocketing premiums to cover injured workers.
"We could look to see if these reforms are working, whether rates are coming down, and is the state saving money," Howle said.
Speier said State Fund is showing "arrogance" with its opposition. She pointed out that State Fund has state employees and top officials who are appointed by the governor.
"We are required to make sure that state agencies are operating appropriately," Speier said.
Los Angeles Times, August 10, 2006
SACRAMENTO — California's secretive government-run workers' compensation insurance company came under attack Wednesday for fighting a bill that would force it to open its books to state auditors.
At issue is legislation by the chairwoman of the Senate Insurance Committee to allow the state auditor to review the administration of the State Compensation Insurance Fund and investigate its finances.
"That a state entity — created specifically to provide insurance as a last resort in the workers' comp area, that is peopled with state employees and has a board appointed by the governor — would not be subject to state auditing review, to me, is the height of chutzpah," said state Sen. Jackie Speier (D-Hillsborough).
But the company — known as State Fund — has maintained that it is a private enterprise exempt from most open-government laws. And it pointed out that it was already regulated by the state, like all other insurance firms. It has recently indicated it may consider a compromise.
(snip)
State Fund has spent an estimated $178,000 on an outside lobbyist who is attempting to coax the lawmakers into watering down the bill....
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I am shocked! Corruption in California government -- it is unheard of, especially in Workman's Comp...shocked, I tell you!!
California Dreamin of an honest government, has been going on since the Gold Rush. Good Luck, if you find it let us all know.
Ops4
Good Luck, if you find it let us all know.
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Sadly, I will probably have been gone, either dead or moved, long before that happens --- :-)
Thing is, Jackie Speier is insane, so even if I thought the State Fund was corrupt, I'd still have to have an adult check over Jackie's assertion before I even went ahead and wondered about it.
The company I work for has a State Fund policy, btw, and after several bad years, followed by several good ones, the rates are now rapidly declining.
IOW, just what should happen. Maybe that's what perked lil' Jackie's ears?
Doesn't Boxer's husband feed big time from the Worker's Comp System?
Doesn't Boxer's husband feed big time from the Worker's Comp System?
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Many of our socialist liberal parasites do -- our great Gray Davis and his mob had their fingers into it. Money extortion was the high-point of his gubernatorial reign of crime.
Would make sense to me.
No state agency of state-paid carrier of any service should be exempt from routine state paid audits.
Oh, but forgive me, that would remove the crookaticians ability to skim.
There have been several attempted inquiries into NC's uninsured/under insured driver's insurance program to determine why there is so much excess dollars, but our Dem Govs have always put the squeeze on the groups trying to prompt the state's insurance commissioner to release details on what the state does with the $2-4 billion+ avg. yearly surpluses.
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