California's Workers' Comp Fund Names Interim Chief

California's State Compensation Insurance Fund named Doug Stewart, its chief risk officer, as interim president and chief executive officer.

Stewart joined SCIF in November 2007, becoming chief risk officer after the passage of governing reforms in 2008. The law recognized SCIF as a public entity, subjecting it to the California Open Public Records Act and opening its board meetings under the state's open meetings act. It allowed the appointment of additional executive staff (BestWire, April 15, 2008). He has a combined 35 years of insurance industry experience in claims, underwriting, marketing and risk management, the state fund said.

Outgoing President and CEO Janet Frank recently announced her departure after two years in the post for family reasons, citing a mother who is battling cancer (BestWire, Sept. 29, 2009).

SCIF is at the center of a legal dispute between Insurance Commissioner Steve Poizner and the Schwarzenegger administration over a plan to sell $1 billion of the fund's assets. Poizner has filed a lawsuit to block any potential sale.

As part of a budget deal to address a skyrocketing state deficit, Gov. Arnold Schwarzenegger signed ABX4 12, legislation to sell a portion of the state-backed workers' compensation insurer's book of business (BestWire, July 21, 2009). Poizner said such action would be both unconstitutional and an invitation to higher rates and premiums. The SCIF board also opposes such a sale.

SCIF holds nearly one-quarter of the workers' compensation market share in California. With $1.7 billion in direct premiums written in 2008, it is the sixth-largest U.S. workers' compensation writer. SCIF saw a 27.7% drop in direct premiums written in 2008 (BestWire, Sept. 14, 2009), which the fund attributed to the state's higher-than-national unemployment rate and failures of new businesses, who are often SCIF customers.

The board of directors will begin a national search for a permanent president and CEO.

The top five writers of workers' compensation in California in 2008, according to BestLink, were: State Compensation Insurance Fund of California, with 22.6% market share; American International Group Inc., with 7.6%; Liberty Mutual Insurance Cos., with 6.7%; Travelers Group, with 6.3%; and Berkshire Hathaway Insurance Group, with 5.7%.