Low Has the Fund’s Back up Against the Wall By Robert Warne - June 6, 2002
With nowhere to run, the insurance commissioner has the California State Compensation Insurance Fund (SCIF) cornered. A letter to SCIF President Kenneth Bollier from California Insurance Commissioner Harry Low has stirred the pot of emotions at SCIF.
The letter dated May 29 made public the Department of Insurance’s (DOI) will concerning corrective actions it expects SCIF to take.
Low urged Bollier to consider seven suggestions that would put SCIF back on firm financial ground. He said premium rates should be increased and discounts and credits to large accounts should be eliminated. Also it was recommended that SCIF no longer pay policyholder dividends, reduce or eliminate commissions paid by producers and eliminate advertising and marketing expenses. It was also proposed that unprofitable agents be terminated and that SCIF should adopt an “Insurer of Last Resort” philosophy.
Bollier was also counseled to review its liability disclosure policy with PriceWaterhouseCoopers. In Low’s opinion, he thinks SCIF should be able to provide exposure data related to the pending A&J Liquor v State Compensation Insurance Fund lawsuit.
The bottom line of the letter was that if Bollier didn’t implement an acceptable action plan to resolve SCIF’s financial position, the DOI would have to pursue corrective actions.
Low said in the letter that SCIF has until June 14 to submit a comprehensive plan that will improve its surplus level and leverage ratios and RBC by year-end 2002.
Adjuster / Examiner Claims Examiner Santa Ana Unified School District Santa Ana, CA
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