Calif. Gov. Arnold Schwarzenegger has signed legislation to help transform the Golden State’s workers’ compensation insurer, the State Compensation Insurance Fund. Assembly Bill 1874 and Senate Bill 1145 are an important step toward increased transparency and strengthened corporate governance for State Fund, according to the organization.
AB1874 expands the State Fund Board of Directors from five to 11 voting members, which will enable the creation of key subcommittees, mandates board training and requires board members to sign financial conflict of interest agreements. Board members will also now receive compensation to ensure the organization can attract and retain quality candidates.
SB1145 provides State Fund with six exempt management positions to allow State Fund to recruit top executives to fill key management positions such as chief financial officer, chief operation officer, general counsel, chief risk officer, chief information officer and chief investment officer to manage State Fund. The bill also makes State Fund subject to the Bagley-Keene and California Public Records Act. State Fund’s next Board of Directors meeting is scheduled for November 20 and 21 and will include open sessions.
“Adding the new exempt management positions and increasing the size of the board will strengthen State Fund’s corporate governance and establish greater accountability and oversight within the organization,” said Jeanne Cain, State Fund Board Chair. “This board has worked very hard to chart a new course for State Fund and bringing our management and board structure and expertise in line with other companies of comparable size and scope is an important piece of that work.”
Cain also credited Jan Frank, State Fund’s president and CEO, for the changes. “Under Jan’s leadership State Fund has made tremendous progress in the areas of corporate governance, strengthening operational efficiency and enhancing customer service to ensure that State Fund is positioned to continue serving as California’s most stable workers’ compensation carrier.”
While SB 1145 provides greater access to State Fund, it also provides important safeguards to protect State Fund’s competitive role in the marketplace, SCIF said in a statement.
“California depends on a financially sound State Fund with our open door policy of writing all business across all classifications and sizes,” Frank said. “We appreciate the public’s interest in State Fund and understand that State Fund is an important resource for California employers and their employees. Open meetings will provide people an opportunity to not only watch our board in action, but also participate, and our newly established Public Records Office will handle the public’s requests for information.
“We are working hard to climb a steep learning curve and have done everything possible to readily respond to the public’s interest,” Frank continued. “This environment is very new for us and we expect the process will evolve and improve as we gain more experience working in it.”
This legislation is one part of a comprehensive plan to transform State Fund initiated by the board in March 2007. Since Jan Frank joined the organization in October 2007, she has enacted many changes and laid a solid foundation for State Fund’s future.
“California’s employers and employees both depend on a healthy workers’ compensation insurance marketplace, and reforming SCIF is key to helping maintain that competitive marketplace,” said Commissioner Steve Poizner. “SCIF was cooperative during this process and has been diligently working with CDI to address a number of concerns as we help them restructure for the 21st century.”
For more information about State Fund’s board meetings, visit www.scif.com.
Sources: CDI, SCIF
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