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State Fund Assures Business as Usual

Published on 7/1/03

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On May 28, 2003, State Compensation Insurance Fund, or State Fund, filed a formal complaint against California Insurance Commissioner John Garamendi and the California Department of Insurance (CDI). In private conversations with State Fund officials, CLIA President/CEO Rick Lawrance was assured that CLIA members could expect the same high degree of service and support despite the media hype surrounding their dispute.

As the failed workers’ compensation system has become a paramount issue to California’s business owners, Garamendi has made efforts to exert control over State Fund and tighten the required reserve in an effort to safeguard the service. As so many insurance providers have been driven out of business in California over recent years, State Fund has become the insurer for over half a million employers in California protecting 13 million workers. Responding to Garamendi’s actions and words, State Fund filed suit against Garamendi and the CDI.

“We have not taken this action lightly, but we must protect the interests of our policyholders, their employees and California’s economy,” explained State Fund President Dianne Oki. “A takeover of State Fund would create further chaos in California’s workers’ compensation marketplace and ultimately be disastrous for California’s economy. Our comprehensive business plan is working. We need more time to fully achieve our objectives which include increasing our surplus and reducing the volume of business we’ve written the last three years as a result of the severe contraction in the workers’ compensation market.”

CLIA remains confident in the product that State Fund provides, and expects that CLIA members will not be affected by the rift between Commissioner Garamendi and State Fund. CLIA’s advocacy team continues to lobby the State Legislature for substantive reform to the fundamental problem, the state workers’ compensation system. Oki added, “We (State Fund) support the Governor’s and Legislature’s efforts to effect fundamental, systemic reforms to ensure the system works for all its stakeholders – California’s injured workers and employers.”

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Quotations courtesy of State Fund

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