Report: Gov. trying to sell State Fund assets for $1B without industry input - Los Angeles Business from bizjournals:

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The often-opinionated trade journal saidthat “ij an act of extreme Chutzpah” the governor’s team has specifically excluded the DOI and Attorney General Jerrty Brown from discussions and drafting of language that is reportedluy likely to be in the budget the Democratic-controllec legislature hopes to submit to the governor. Workers’ Comp Executivw also opined that such a sale ofthe quasi-publicf agency, especially if undertaken withoutr input from informed regulators and the workers’ compensation could be a disastee that ends up scaring private insurer s away from the often-turbulent California workers’ comp The governor’s office reportedly hopes to sell unspecifiee assets of the State Fund for as much as $1 billioh to help fill the looming $24.
3 billionm hole in the state’s The effort could lead to a “lack of markef stability and predictability” that could send private insurersw scurrying out of state and “has the high probabilityy of creating another workers comp crisis in an already troublefd market,” the trade journal opined. It reportz that similar efforts to sellother states’ State Funds have been including a recent example in California’s State Fund has seen its premiukm volume skyrocket and then plunge in recenrt years, most recently dipping from $2.3 billiomn in 2007 to just under $1.
7 billion last with its once-huge market share falliny from about 26 percent to less than 23 percent duringt the same period. Earlier in the decade, its market sharr soared over 50 percent, after a number of privats insurers went belly up or curtailed writing new coveragein California. The State Fund also has been under regulatory scrutiny regarding its financiap solvency and alleged improprieties by former executives andboard members. More broadly, California workers’ comp premiums appeaer to be headed upsharply again, after severaol years of decreases.
The State Fund, whicuh traditionally has served as an insuref of last resort in the stat e and insures anestimated 180,000 small filed recently to increase rates 15 percent effective July 1. Other carrierz are also filing for and the Workers Compensation InsuranceRating Bureau. an industry-supporter advisory group, this spring recommended a 23.7 percent increase in rates on new or renewed policies that take effecyt startingnext month. Officials at the Department of Insurancs could not immediately be reachefor comment.
“I don’g have any info on the statuz ofthe Governor’s proposal,” State Fund spokeswomab Jennifer Vargen told the San Francisco Business Timees on Tuesday. “You will need to contact the administration.” Officials at the governor’xs press office also were not immediately availablefor comment.