A State Senate hearing will be held Wednesday to examine the operations of the California State Compensation Insurance Fund following the ouster of its president, it was announced.
"I'm concerned about what may be gross mismanagement of the State Compensation Insurance Fund," said State Sen. Michael Machado, D-Linden, chairman of the Senate Banking, Finance and Insurance Committee, explaining why he called the session.
On Tuesday, after what it said was an internal investigation, the SCIF board removed its president, James Tudor, and vice president, Renee Koren.
The board gave no reason for their dismissal, saying it could not make public a personnel matter, but the Los Angeles Times reported the executives' removal was related to a probe into possible conflicts of interest involving the fund's selling of discounted group policies to individual employers.
Sen. Machado, explaining his concern about SCIF, said, "This agency plays an integral role in the state workers' compensation system by providing many employers with affordable insurance and keeping rates down. We must make sure the agency is in competent hands."
According to committee spokesperson Erin Ryan, Wednesday's witnesses include SCIF Board Chair Jeanne Cain and SCIF interim President Lawrence Mulryan. A member of the SCIF legal team will likely provide testimony as well, she added.
State Senate President pro Tem Don Perata, D-Oakland, expressed a desire that any issues at the fund be discovered as quickly as possible.
"The State Compensation Insurance Fund is crucial to ensuring that employers pay the lowest possible rates for workers' compensation coverage," he said. "If there are problems with how the fund is being managed, we need to know about them and correct the situation immediately."
In addition, Sen. Perata has appointed Don Moulds, the director of the Senate Office of Research, as the Senate's ex-officio member of the SCIF Board.
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